Which of the following is true?
A) Opportunity costs are the same as explicit costs.
B) A firm's net income is the same as its accounting profit.
C) If a firm's accounting profits are positive, its economic profits must also be positive.
D) A firm's accounting profit is equal to its economic profit.
B
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Assume that a consumer can spend $20 on two goods–pens and pencils. If the price of one pen is $5 and the price of one pencil is $2, which of the following combinations of the two goods represents a point on the consumers budget constraint?
A) 3 pens and 2 pencils B) 1 pen and 10 pencils C) 2 pens and 5 pencils D) 2 pens and 3 pencils
The price elasticity of demand for movies is approximately 1 and 500,000 tickets are sold per day. If the average price of a movie ticket increases by 20 percent, the number of tickets sold each day decreases to ________
A) 400,000 B) 300,000 C) 420,000 D) 475,000
Market equilibrium occurs where the quantity supplied is equal to the quantity demanded
Indicate whether the statement is true or false
An example of how trade diversion results in a suboptimal situation is auto parts trade between Mexico and the United States. After NAFTA:
a. Mexico decreased its sales of auto parts to the United States. b. the United States purchased more auto parts from Mexico due to the elimination of tariffs and reduced purchases from East Asia, which was the lowest-cost producer. c. the United States brought a complaint against Mexico for low quality auto parts. d. the United States purchased fewer auto parts from Mexico due to the elimination of tariffs and increased purchases from East Asia, which was the lowest-cost producer.