A firm's economic profit is the difference between the accounting profit and total fixed costs of the firm
a. True
b. False
Indicate whether the statement is true or false
False
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Suppose the price of capital and labor remain constant. As a firm's expenditures for capital and labor increase, its isocost line
A) rotates outward on the Y-intercept. B) shifts in parallel to the original isocost line. C) rotates outward on the X-intercept. D) shifts out parallel to the original isocost line.
Commercial banks are financial intermediaries, as are ________
A) household savers B) state and local governments C) insurance companies D) organized exchanges
All of the following are problems associated with maintaining a cartel except
a. cartels are illegal. b. a large amount of information is needed to coordinate a cartel. c. profits are not maximized by a cartel so it will evolve into a monopoly. d. each member of the cartel has an incentive to "chisel" by expanding output.
A firm might choose to produce its own inputs if:
A. specialized investment is not important. B. spot markets for the input exist. C. the exchange environment is not complex. D. long-term contracts are costly to write.