A firm has 200 million in total revenue and explicit costs of 190 million. Suppose its owners have invested 100 million in the company at an opportunity cost of 10 percent interest rate per year. The firm's economic profit is:
a. 400 million.
b. 100 million.
c. 80 million.
d. zero.
QUESTION 2An example of a stock variable in economic theory will be:
a. the amount of money saved by an individual each week.
b. the amount of money spent on buying gasoline each month.
c. the weekly grocery bill of an average household.
d. the total value of the government bond held by an individual.
e. the total fiscal spending during a particular quarter.
QUESTION 3Which of the following is always a characteristic of the oligopoly market structure?
a. Many sellers, each small in size relative to the overall market.
b. Few sellers.
c. All sellers produce identical products.
d. Easy, low-cost entry and exit.
QUESTION 4If a firm has total revenue of 200 million, explicit costs of 190 million, and implicit costs of 30 million, its economic profit is:
a. 200 million.
b. 70 million.
c. 10 million.
d. 10 million.
e. 20 million.
QUESTION 5Which of these statements best describes a flow variable?
a. An economic variable that measures something at a particular point in time
b. An economic variable whose value is determined by the market
c. An economic variable that is measured per unit of time
d. An economic variable whose value shows no change over time
e. An economic variable that remains static when other related variables change
QUESTION 6Which of the following is always a characteristic of the oligopoly market structure?
a. Many sellers, each small in size relative to the overall market.
b. Few sellers.
c. All sellers produce identical products.
d. Easy, low-cost entry and exit.
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