Which of the following is an example of an "implicit cost"?
A) Interest that could have been earned on retained earnings used by the firm to finance expansion.
B) The payment of rent by the firm for the building in which it is housed.
C) The interest payment made by the firm for funds borrowed from a bank.
D) The payment of wages by the firm.
A
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The principle that individuals and firms pick the activity level where the incremental benefit of that activity equals the incremental cost of that activity is known as the
A) spillover principle. B) principle of diminishing returns. C) principle of opportunity cost. D) marginal principle.
As the number of British pounds that exchange for a dollar rises on foreign currency markets: a. the British will have an incentive to import fewer U.S. goods
b. the British will find it easier to export goods to the United States. c. the British will find U.S. goods to be more expensive in their stores. d. all of the above will be true.
Consumption responds mostly directly to changes in the:
A. nominal price of a good. B. real price of a good C. perfect price of a good. D. the absolute dollar price of a good.
The market supply curve is calculated by:
A.) Summing the marginal cost curves of all firms. B.) Averaging the individual supply curves. C.) Summing the prices from individual supply curves. D.) Averaging the individual marginal cost curves below ATC.