Economic profit is defined as the difference between:
a. total revenue and total explicit cost.
b. total revenue and total implicit cost.
c. explicit costs and implicit costs.
d. total revenue and total costs, both explicit and implicit.
d
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The cost of producing a tube of tooth paste is $0.05. If the market for tooth paste is monopolistically competitive, a manufacturer who charges $0.05 for each bottle will ________
A) shut down production in the short run B) exit the industry in the long run C) incur a loss in the short run D) earn zero economic profits in the short run
Without any restrictions in a perfectly competitive market, if there is a sudden rightward shift in the demand for a good:
A) sellers of the good will increase the supply of the good at the same price. B) sellers of the good will increase the quantity of the good supplied in the market. C) sellers of the good will decrease the supply of the good at the same price. D) sellers of the good will decrease the quantity supplied.
According to the quantity theory of money, the quantity of money determines the
a. interest rate. b. level of real output. c. price level. d. level of employment.
Economists make assumptions because
a. they need to incorporate value judgments into their models. b. analysis without assumptions would be impossibly complex. c. they always have imperfect information about reality. d. assumptions are the final product of careful economic analysis. e. assumptions allow economists to ignore things that they cannot explain.