What is the difference between economic and accounting profit? Why is a distinction between them important?
An economic profit includes implicit costs and accounting profit does not. A distinction between them is important because an accounting profit is a relative amount of money. Some amount of accounting profit may or may not be a sufficient amount of profit to keep an entrepreneur in his/her present line of business. Whereas an economic profit, if it is earned, is always good news because it is an amount of profit above the entrepreneur's opportunity cost.
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Starting from long-run equilibrium, the long-run impact(s) of a sharp drop in oil prices, compared to the original equilibrium, is(are):
A. the same inflation and the same output. B. lower inflation and lower output. C. higher inflation and the same output. D. higher inflation and lower output.
Suppose that the quantity of pizza demanded decreased by 15 percent after an increase in price of 10 percent. What is the price elasticity of demand for pizza?
A) 1.50 B) 0.67 C) -1.50 D) -0.67
Output per person is 170 in an economy in which 15 percent of the population are engaged in research and development, where their productivity is 0.002, and the total population size is 100 million
If this economy is on a balanced growth path, then output per person in the next period will be ________. A) 175.1 B) 195.5 C) 176.2 D) 177.3
Suppose that only one curve shifts. If you observe that the equilibrium price increased while the equilibrium quantity decreased, then the market experienced a(n):
A. decrease in supply. B. increase in demand. C. increase in supply. D. decrease in demand.