A firm has $350 million in revenues and explicit costs of $150 million. If its owners have invested $150 million in the company at an opportunity cost of 10 percent a year, the firm's economic profit is:
a. $50 million

Distinguish between a command-and-control economic system and a price system

What will be an ideal response?

Economic models

A) are used to explain how people think. B) are used to explain how people behave. C) are essential representations of the real world. D) are never used for making economic projections or predictions.