If economic profits in an industry are zero and implicit costs are greater than zero, then:
A. Resources will move out of the industry
B. There will be no production in the short run
C. Accounting profits are greater than zero
D. New firms will enter the industry
C. Accounting profits are greater than zero
You might also like to view...
Suppose a firm uses workers and office space to produce output. The firm is locked into a year-long lease on its office space, but it can easily vary the number of employee-hours it uses each day. The table below describes the relationship between the number of employee-hours the firm uses each day and the firm's daily output. Each unit of output sells for $2, the hourly wage rate is $14, and the rent on the office space is $50 per day.Employee-HoursPer DayOutputPer Day0014048091201516023200When the firm uses 9 employee-hours, its total revenue each day is:
A. $18. B. $160. C. $120. D. $240.
Figure 7.2
Refer to Figure 7.2. Assume that Ashley faces budget line CD with her $120 income. Then the prices of a hamburger and a book are:
A. $2 and $5, respectively. B. $3 and $6, respectively. C. $4 and $7, respectively. D. $5 and $8, respectively.