Economic costs of production differ from accounting costs in that
A) economic costs include expenditures for hired resources while accounting costs do not.
B) accounting costs are always larger than economic cost.
C) accounting costs include expenditures for hired resources while economic costs do not.
D) economic costs add the opportunity costs of a firm using its own resources while accounting costs do not.
D
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For a bank, "reserves" refers to:
A. the loans it will call back early if a recession starts. B. the cash it keeps on hand to meet withdrawal requests. C. the part-time workers that will be offered full-time jobs if necessary. D. the cash it lends to households or businesses who want to borrow.
Suppose farmers get together and decide to be less productive. They want to do this so that they can shift the supply curve of farm products leftward and raise the price. What are the thoughts of a profit-maximizing farmer most likely to be once this agreement has been made?
A) If I break the agreement while everyone else holds to it, I can make myself better off. B) I am happy that we decided to be unproductive; I can't be unproductive by myself. C) I will definitely hold to the agreement. D) Everyone will break the agreement but me.