Suppose a family-owned donut shop has $80,000 in total revenues, $36,000 in rent, and $20,000 in additional operating costs. The husband and wife work in the shop and pay no wages to themselves or others. The economic profits from the donut shop are
A. more than $24,000.
B. $80,000.
C. less than $24,000.
D. $24,000.
Answer: C
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Which of the following cannot be used to justify efficiency wages
a. Sticky price (menu cost) models b. turnover costs c. worker shirking d. worker morale
A monopolist hires fewer workers than a perfectly competitive industry, other things being equal, because
A) a monopolist has to pay higher wages in order to attract additional workers. B) the monopolist substitutes more capital for labor when compared to a competitive industry. C) the monopolist producer has to deal with unions and face higher wages than do competitive industries. D) the monopolist produces less output than a competitive industry.
The concept of scarcity as used by economists refers to:
a. a situation of excess supply. b. a situation in which the available resources are not enough to satisfy the wants of the people at a zero price. c. a situation in which an item is available only in very small quantities. d. a situation in which an item is very expensive. e. a situation in which a resource is nonrenewable.
You have a bond that you can redeem for $10,000 one year from now. The interest rate is 10 percent (0.10) per year. How much is the bond worth today?
a. $9,090.91 b. $10,000.00 c. $8,264.46 d. $9,523.81 e. $9,000.00