Implicit costs are:
A. regarded as costs by accountants but not by economists.
B. nonexpenditure costs.
C. costs that vary proportionately with output.
D. payments that a firm makes to other firms or individuals who supply resources to it.
Answer: B
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What is the marginal propensity to consume? Can the marginal propensity to consume be greater than 1?
What will be an ideal response?
Demand functions are "homogeneous of degree zero in all prices and income.". This means
a. a proportional increase in all prices and income will leave quantities demanded unchanged. b. a doubling of all prices will not alter consumption decisions. c. prices directly enter individuals' utility functions. d. an increase in income will cause all quantities demanded to increase proportionately.
Total planned expenditures in a closed economy are equal to
A. investment + saving + transfers. B. consumption + savings + transfers + investment. C. consumption + investment + government expenditures. D. saving + investment + government expenditures.
Most firms are not monopolies in the real world because
a. firms usually face downward-sloping demand curves b. supply curves slope upward c. price is usually set equal to marginal cost by firms d. monopolies are not efficient e. there are substitutes for most goods