When a firm makes zero economic profit, it means that:
a. the firm is covering implicit costs alone
b. the firm is covering the total opportunity costs of its resources.
c. the firm is covering explicit costs alone.
d. the firm is running at an accounting loss.
b
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If the Federal Open Market Committee decides to increase the money supply, then the Federal Reserve
a. creates dollars and uses them to purchase government bonds from the public. b. sells government bonds from its portfolio to the public. c. creates dollars and uses them to purchase various types of stocks and bonds from the public. d. sells various types of stocks and bonds from its portfolio to the public.
Answer the following statement true (T) or false (F)
1) A key difference between neoclassical economics and behavioral economics is that in behavioral economics context affects preferences. 2) Behavioral economics observes that people generally do not act according to their self- interest. 3) Neoclassical economics and behavioral economics both recognize that people make errors in their decision making. 4) According to behavioral economics, temptation to make harmful decisions can be overcome by presenting decision makers with better information and more options.