A lawyer running his own business earns $18,000 in revenue monthly. He pays $8,000 as explicit costs including staff salary and utilities. He owns the office space so no rent is paid.. The lawyer could work for other legal firms and earn $10,000 per month. His business profit is ________ and his economic profit is […]
Date: September 9th, 2020
The term Production Function refers to the A) use of machinery and equipment in production. B) relationship between costs and output. C) relationship between inputs and output. D) role of labor unions. ANSWER C
Date: September 9th, 2020
If banks face a problem in loan markets when bad credit risks are the ones most likely to seek bank loans, it is described as A) moral hazard. B) moral suasion. C) adverse selection. D) fraud. ANSWER C
Date: September 9th, 2020
The production period in which at least one input is fixed in quantity is the A) production run. B) long run. C) short run. D) planning horizon. ANSWER C
Date: September 9th, 2020
The difference between the short-run and the long-run is A) three months, or one business quarter. B) the time it takes for firms to change all inputs in the production process. C) the time it takes for firms to change only their variable inputs. D) More information is required to answer this question. ANSWER […]
Date: September 9th, 2020
The above figure shows the cost curves for a competitive firm. The firm will incur economic losses if the price is less than A) $0. B) $5. C) $10. D) $11. ANSWER C
Date: September 9th, 2020
John takes out a student loan at a bank but spends his money in Las Vegas to play at the casino. This situation is an example of A) moral hazard. B) moral suasion. C) adverse selection. D) fraud. ANSWER A
Date: September 9th, 2020
According to the principal of comparative advantage a country A) that produces goods at the lowest absolute cost will export those goods. B) will import goods it can produce at the lowest relative cost. C) will export goods it can produce at the lowest relative cost. D) will only import those goods that it cannot […]
Date: September 9th, 2020
Market signaling A) is a way of conveying information to other parties in a transaction where asymmetric information exists. B) represents a dominant strategy in a multi-player game. C) results in an optimum solution to a beach kiosk scenario. D) None of the above ANSWER A
Date: September 9th, 2020
In a call center, which of the following situations can be considered as a variable input in the short run? A) the level of computer software being utilized B) the number of call center representatives on duty at the center C) the number of call center managers or supervisors D) the size (e.g., square footage) […]
Date: September 9th, 2020
