An economist left her 100,000-a-year teaching position to work full-time in her own consulting business. In the first year, she had total revenue of 200,000 and business expenses of 100,000 . She made a(n):
a. economic profit.
b. economic loss.
c. implicit profit.
d. accounting loss but not an economic loss.
e. zero economic profit.
QUESTION 2An economic variable that is measured per unit of time, such as spending per year, is known as a:
a. stock variable.
b. periodic variable.
c. dummy variable.
d. flow variable.
e. controlled variable.
QUESTION 3The industry that most closely approximates the conditions of the oligopoly model is:
a. Restaurant.
b. Retail clothing.
c. Home construction.
d. Airlines.
QUESTION 4Economic profit is:
a. always less than zero.
b. never less than accounting profit.
c. less than accounting profit if implicit costs are zero.
d. less than accounting profit if implicit costs are greater than zero.
QUESTION 5An example of a flow variable in economics is:
a. the total amount of bank loan taken by Emily.
b. the value of an apartment owned by Jerome.
c. the price of an antique painting used to decorate an office.
d. the earnings of Malaya from piano classes each month.
e. the total value of the U.S. treasury bonds held by China.
QUESTION 6One key characteristic that is distinctive of an oligopoly market is that:
a. the demand curve facing each firm is downward sloping, with a marginal revenue curve that lies below the firm's demand curve.
b. the decisions of one seller often influences the price of products, the output, and the profits of rival firms.
c. there is only one firm that produces a product for which there are no good substitutes.
d. there are many sellers in the market and each is small relative to the total market.
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