Accounting profit is equal to
A) total revenue minus dividends and interest.
B) dividends paid.
C) total revenue minus implicit costs.
D) total revenue minus explicit costs.
Answer: D
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A monopolistically competitive firm makes positive economic profits if ________
A) price is less than average total cost B) price is higher than average total cost C) price equals marginal cost D) price equals average fixed cost
The certainty equivalent approach to accounting for risk in capital budgeting involves
A) adjusting the discount rate used to calculate net present values. B) adjusting the expected cash flows. C) estimating the coefficient of variation. D) estimating the standard deviation of the net present values.
The basic difference between a tariff and quota is that:
a. a quota can be imposed both on imports and exports, whereas a tariff can be imposed only on imports. b. a quota yields revenue to the government, whereas a tariff does not yield any revenue. c. a tariff reduces the import of the goods with greater certainty than quota as the amount of import restricted by quota depends on the price elasticity of demand for importable. d. a tariff is a quantitative restriction on imports, whereas a quota is an import duty. e. a tariff raises the price of the product only in the domestic market, whereas with a quota, both domestic and foreign producers receive a higher price.
Which of the following will be least effective in dealing with the structural adjustment problems?
A. A fall in domestic labor costs B. Trade restrictions that raise foreign goods prices C. A rise in foreign labor costs D. A fall in foreign goods prices