Economic profit is:
a. total revenues minus variable costs.
b. total revenues minus private costs.
c. total revenues minus explicit costs.
d. total revenues minus total costs.
d
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Which of the following is false about a liquidity trap situation: a. Quantitative easing might be a more effective strategy to stimulate the economy than buying short term government securities. b. The Fed can lower both short term and long term interest rates by using quantitative easing. c. The Fed cannot easily reduce the fed funds interest rate
d. Quantitative easing may be able to affect long term interest rates even when the Fed is unable to appreciably lower short term interest rates.
Bill has $10 to spend on a Superman, Batman, or an X-Men T-shirt. Bill buys the Superman T-shirt and the Batman shirt was a close second choice. What is the opportunity cost?
A. The amount he spent, $10. B. Nothing, since he got his preferred choice. C. The Batman T-shirt. D. The X-Men T-shirt.