Suppose that the implicit cost for a business was $2,000 and the explicit cost was $5,000 and that the firm sold 1,000 units of its products at $7 per item. We can conclude that the firm's
A. accounting and economic profits were both $0.
B. accounting profit was $7,000, and its economic profit was $0.
C. accounting profit was $2,000, and economic profit cannot be determined.
D. accounting profit was $2,000, and economic profit was $0.
Answer: D
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Economists assume consumers select a bundle of goods that maximizes their well-being subject to
A) their budget constraint. B) their income. C) relative prices. D) their marginal rate of substitution.
In the above figure, the marginal revenue product is represented by line
A) "a." B) "b." C) "c." D) "d."
M1 is comprised of currency held outside banks + traveler's checks + __________
A) credit cards B) savings deposits C) gold D) checkable deposits E) money market mutual funds
Farmer Brown sells her wheat in a perfectly competitive market. Suppose the current market price of wheat is $2.50 per bushel.
A. Farmer Brown can sell as much wheat as she likes at $2.50 per bushel. B. Farmer Brown can charge any price for her wheat, but will maximize profit if she sells for less than $2.50. C. Farmer Brown should charge more than $2.50. D. Farmer Brown can charge more than $2.50 and still sell some wheat.