Refer to Scenario 7.4 below to answer the question(s) that follow.SCENARIO 7.4: You own and are the only employee of a company that sells custom embroidered pet sweaters. Last year your total revenue was $120,000. Your costs for equipment, rent, and supplies were $30,000. To start this business you invested an amount of your own capital that could pay you a $50,000 a year return.Refer to Scenario 7.4. Your economic profit last year was
A. -$20,000.
B. $40,000.
C. $70,000.
D. $90,000.
Answer: B
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Indicate whether the statement is true or false
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a. steel market b. fiberglass market c. concrete market d. construction market e. boat market
Which of the following suggests that private markets can be effective in dealing with externalities?
a. the "invisible hand" b. the law of diminishing social returns c. the Coase theorem d. technology policy
In the open-economy macroeconomic model, if the supply of loanable funds increases, net capital outflow
a. and the real exchange rate increase. b. and the real exchange rate decrease. c. increases and the real exchange rate decreases. d. decreases and the real exchange rate increases.