Assume Brad worked as a contractor for a year and had revenues of 120,000 and explicit cost of 70,000 . If he could have been paid 80,000 working for a computer company, his accounting profit as a contractor was ____ and his economic profit was ____.
a. 50,000 . -30,000
b. 10,000 . 50,000
c. 40,000 . 50,000
d. 50,000 . 40,000
QUESTION 2A bond that provides no interest payments but instead is issued at a value that is lower than its face value is called:
a. a no-interest bond.
b. a load-free bond.
c. a no-load bond.
d. a zero-coupon bond.
e. a coupon bond.
QUESTION 3When an economy's limited resources are moved into the production of one commodity, the production of a valuable alternative has to be foregone. This most valuable alternative lost is referred to as:
a. the marginal cost.
b. the opportunity cost.
c. the sunk cost.
d. the fixed cost.
QUESTION 4When a good becomes more expensive, it yields less satisfaction per dollar, so consumers buy less of it and more of other goods. This is called the _____ effect.
a. substitution
b. income
c. replacement
d. augmentation
e. disbursement
QUESTION 5When economic profits in an industry are zero and implicit costs are positive:
a. accounting profits will be greater than zero.
b. resources will be attracted to the industry.
c. resources will not tend to either enter or leave the industry, other things equal.
d. both (a) and (c) will be true.
QUESTION 6Notes are debt securities which have a maturity period of:
a. 0-5 years.
b. 10-15 years.
c. 0-1 year.
d. 10-20 years.
e. 1-10 years.
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