Which of the following statements is false?
A) Regardless of the commodity, the farmer always receives 20 cents of the dollar spent in food.
B) The Latin phrase ceteris paribus means everything else the same or holding all other factors constant.
C) The rational consumer maximizes satisfaction subject to a budget constraint.
D) Agricultural economics is an applied social science.
Answer: A
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Dr. Khan starts his own dental practice after quitting his $150,000 job at The Mall Dental Clinic. His revenues for the first year are $500,000
He paid $90,000 in rent for the dental office, $60,000 for his office manager's salary, $24,000 for the dental hygienist, $150,000 for insurance, and $6,000 for other miscellaneous costs. The normal profit from running his business is $20,000. Which of the following statements is true? A) His accounting profit is $350,000. B) His economic profit is $150,000. C) His economic profit is zero. D) His accounting profit is zero. E) None of the above answers is correct.
If the price elasticity of demand for airline tickets is 1.4 for a leisure traveler and 0.7 for a business traveler, then a price-discriminating monopolist would charge
A) a higher price for the business traveler than the leisure traveler. B) the same price for both travelers. C) a lower price for the business traveler than the leisure traveler. D) a less profitable price for the business traveler than the leisure traveler.