Question

The difference between economic and accounting profit is:

		the implicit costs of the resources provided by the owners
		they are the same
		economic profit does not account for opportunity costs
		accounting profit is more accurate

The role of profits in a market economy is to:

		enrich the capilitist
		enrich the laborers
		allocate resources
		redistribute the wealth

If the economic profits of a firm are above normal they are also:

		the return allowed by the Fed.
		lesser than the maximum allowed in the industry
		in excess of the risk-adjusted normal rate of return
		in line with expectations

The first derivative of Total Revenue is:

		Average revenue
		there is not enough information to answer this question
		Marginal Cost
		Marginal Revenue

"In the long run, all costs are:"

		fixed
		accounted for
		variable
		not relevant

Total Revenue is maximized where

		Marginal revenue is zero
		marginal revenue is also maximized
		marginal costs are minimized
		average costs are maximized

Profits are maximized when:

		average revenue and total revenue are zero
		marginal revenue is also maximized
		marginal revenue equals marginal costs
		marginal costs are minimized

A change in the price of a good will cause a change in that good's:

		demand
		supply
		quantity demanded
		demand curve

Answer 1

1. The implicit costs of the resources provided by the owners

Reason: Economic profit = Accounting profit - Implicit cost

2. Enrich the capitalists

3. In excess of risk adjusted normal rate of return

4. Marginal revenue

5. Variable

6. Marginal revenue is zero

7. Marginal revenue equals marginal cost

8. Quantity demanded