The sole proprietor of the Milwaukee Machine Company receives all accounting profits earned by her firm and a $28,000-a-year salary. She has a standing salary offer of $35,000 a year working for a large corporation. If she had invested her capital outside her own company, she estimates that would have returned $22,000 this year. If accounting profits for the year were $50,000, economic profits were:
A. $0
B. -$7,000
C. $21,000
D. $50,000
C. $21,000
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During a business cycle recession, total production ________ and total employment ________
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases
Refer to Scenario 10.8. The deadweight loss from monopoly is ________
A) 0 B) 5 C) 10 D) 25 E) none of the above
According to Lerner, if we do not know people's utility functions, we
a. cannot engage in redistributing incomes among people b. can still assume that the marginal utility of a dollar for the rich is higher than for the poor c. make less of a mistake by assuming that they are equal d. should let the market determine the distribution of income e. should assume they are unequal because it is the most likely
Which of the following is an example of a public good?
A. a weather warning system B. a sofa C. a bottle of soda D. a television set