Which of the following expressions is correct?
a. accounting profit = economic profit + implicit costs
b. accounting profit = total revenue - implicit costs
c. economic profit = accounting profit + explicit costs
d. economic profit = total revenue - implicit costs
a
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Given the following diagram:
If the actual market price were fixed at $6 per unit in the above diagram
A. There would be a shortage of 20 units. B. There would be a surplus of 20 units. C. There would be a shortage of 40 units. D. There would be a surplus of 40 units.
If the hourly wage of U.S. workers is $16, the hourly wage of Mexican workers is $2, and U.S. workers produce 5 times as much output per hour as Mexican workers, then, other things equal, it would be efficient to locate production facilities in:
A. the United States since the cost per unit of output will be higher. B. Mexico since the cost per unit of output will be higher. C. the United States since the cost per unit of output will be lower. D. Mexico since the cost per unit of output will be lower.
One of the specific goals for central bankers is financial system stability. Considering the U.S., for example, would this imply that the Federal Reserve would always take action to prevent any single bank from failing? Explain.
What will be an ideal response?
On November 7, 1996, the Distilled Spirits Council of the United States decided to end its voluntary ban on television and radio liquor advertisement. The ban on hard liquor advertising had been in effect since 1936 for radio and 1948 for television
Assuming that advertising is a prisoner's dilemma, and that if one company advertises, its competitors will also choose to spend money to advertise, did the lifting of this ban likely increase or decrease the profits of hard liquor companies? Briefly explain. What will be an ideal response?