If a firm buys a building so as to have office space for its workers, the monthly opportunity cost of the building is best measured as
A) the monthly mortgage payment the firm must pay.
B) the price the firm paid divided by twelve.
C) zero.
D) the rent the firm could earn if it rented the building to another firm.
D
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Adam Smith used the term commercial society to refer to a society in which
A) business interests control the political system. B) everyone identifies value with price. C) everyone lives by exchanging. D) increased income is everyone's principal life goal. E) people behave without regard for the interests of others.
The above figure illustrates a firm's total revenue and total cost curves. Which one of the following statements is FALSE?
A) Economic profit is the vertical distance between the total revenue curve and the total cost curve. B) At output Q1 the firm makes zero economic profit. C) At an output above Q3 the firm incurs an economic loss. D) At output Q2 the firm incurs an economic loss.