If an economist were to consult for a major Fortune 500 company, and he reached the conclusion the firm was making zero economic profit,
A) the firm's accounting profit would be greater than zero.
B) the firm should go out of business immediately.
C) the firm's accounting profits would be lower.
D) the economist's numbers were probably wrong because economic profit can never be zero.
A
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If a monopolist faced a downward sloping average cost curve that lies fully above market demand, he will not produce if he can only charge a single per-unit price, but it would also be inefficient for him to produce.
Answer the following statement true (T) or false (F)
Winnie's Car Wash is a perfectly competitive firm. The table above shows Winnie's total product schedule. If the price of a car wash is $4, and Winnie maximizes his profit when he employs 3 workers, the wage rate is
A) $25 per day. B) $30 per day. C) $70 per day. D) $50 per day.
In the United States in 2013, the Bureau of Economic Analysis began counting spending by firms and individuals on developing entertainment products as investment. This change will
A) add to GDP. B) only change GDP if the development occurs within the borders of the United States. C) take away from GDP. D) not change GDP.
__________ occurs because firms have an incentive to become riskier after their loans are funded
A) Moral hazard B) Adverse selection C) Manager-stockholder conflict D) Manager-lender conflict