In a market economy, which of the following is an incentive for producers to produce efficiently?
A. The production possibilities curve.
B. Profits.
C. Government laws and regulations.
D. The public's welfare.
Answer: B
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Refer to the table above. If the price of a chair increases to $15, and the rental price of machines is $90 per day, up to how many machines should the firm rent to maximize profits?
A) 1 B) 3 C) 5 D) 6
An investment opportunity has two possible outcomes. The expected value of the investment opportunity is $250. One outcome yields a $100 payoff and has a probability of 0.25. What is the payoff of the other outcome?
A) -$400 B) $0 C) $150 D) $300 E) none of the above
Generally when calculating profits as total revenue minus total costs, accounting profits are larger than economic profits because economists take into account:
A. only explicit costs. B. both explicit and implicit costs. C. only implicit costs. D. Both types of profits are always equal because they account for the same costs.
A perfectly inelastic supply curve is
A. horizontal. B. an upward sloping straight line that intersects the origin. C. vertical. D. downward sloping.