If the quantity demanded of product S increases as the price of product T decreases, then S and T are complements.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 2An example of an explicit cost of production is:
a. the cost of foregone labor earnings for an entrepreneur.
b. the cost of flour for a baker.
c. the foregone rent that could have been earned if land owned by a firm was not used as its parking lot.
d. provided by none of the above.
QUESTION 3An example of human capital is the purchase of a computer to help accountants.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 4The cross-price elasticity between movie tickets and video rentals is positive.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 5An economic profit of zero implies:
a. normal profit.
b. the firm is covering both explicit and implicit costs.
c. the firm's revenues are sufficient to compensate the money and time that the owners put into the business.
d. all of the above
QUESTION 6A compensating wage differential is a wage difference attributable to the difference in the marginal productivity of workers.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 7Other things remaining unchanged, the longer the time period under consideration, the greater will be the price elasticity of demand.
a. True
b. False
Indicate whether the statement is true or false
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