Which of the following statements is true of explicit costs for a firm?
a. Explicit costs include the opportunity costs of the funds that are invested in a firm
b. Explicit costs do not include the opportunity costs of the funds that are invested in a firm.
c. Explicit costs are deducted from the total revenue of a firm to calculate the economic profit made by the firm.
d. Explicit costs for a firm are always higher than its implicit costs.
b
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The fact that indifference curves are downward sloping
A) is not true. B) follows from the fact that more is preferred to less. C) follows from the property that the consumer likes diversity in his or her consumption bundle. D) follows from the property that consumption and leisure are normal goods.
One difference between moral hazard and adverse selection is
a. Adverse selection has to do with unobservable characteristics of individuals b. Moral hazard has to do with unobservable actions of individuals c. Adverse selection is individuals change their behaviors because of a contract d. Only A&B