Question 1

Economic profit is always

Accepted Answer

A)  greater than accounting profit. 
B)  equal to accounting profit. 
C)  less than accounting profit. 
D)  equally likely to be either greater or less than accounting profit. 
A)  greater than accounting profit. 
B)  equal to accounting profit. 
C)  less than accounting profit. 
D)  equally likely to be either greater or less than accounting profit.

Question 2

Superstars in sports or entertainment presumably would be willing to continue working in their specific areas for lower income than they are currently earning. This implies that

Accepted Answer

A)  the large salaries serve no allocative function and only serve to make the superstars richer. 
B)  superstars are exploiting their fans by receiving such a large salary. 
C)  superstars do not respond to monetary incentives. 
D)  the high salaries are used to allocate their time but fail to bring in new sources of supply (other superstars) that are exactly like themselves. 
A)  the large salaries serve no allocative function and only serve to make the superstars richer. 
B)  superstars are exploiting their fans by receiving such a large salary. 
C)  superstars do not respond to monetary incentives. 
D)  the high salaries are used to allocate their time but fail to bring in new sources of supply (other superstars) that are exactly like themselves.

Question 3

According to the random walk theory

Accepted Answer

A)  the probability that a stock's price will increase tomorrow is greater if it increased today. 
B)  the probability that a stock's price will increase tomorrow is greater if it decreased today. 
C)  the best forecast of tomorrow's price is today's price. 
D)  the best forecast of tomorrow's price is found by determining the trend for the last five trading days. 
A)  the probability that a stock's price will increase tomorrow is greater if it increased today. 
B)  the probability that a stock's price will increase tomorrow is greater if it decreased today. 
C)  the best forecast of tomorrow's price is today's price. 
D)  the best forecast of tomorrow's price is found by determining the trend for the last five trading days.

Question 4

A difference between a share of stock in a corporation and a corporate bond is that

Accepted Answer

A)  the share of stock is a legal claim while the bond is not. 
B)  the bond owner has voting rights within the corporation whereas the stockholder does not. 
C)  the bond owner is entitled to receive a fixed annual coupon payment plus a lump-sum payment at the bond's maturity date, whereas the stockholder is entitled to a share of future profits. 
D)  stocks are issued in return for funds that are lent to the corporation. 
A)  the share of stock is a legal claim while the bond is not. 
B)  the bond owner has voting rights within the corporation whereas the stockholder does not. 
C)  the bond owner is entitled to receive a fixed annual coupon payment plus a lump-sum payment at the bond's maturity date, whereas the stockholder is entitled to a share of future profits. 
D)  stocks are issued in return for funds that are lent to the corporation.

Question 5

Suppose your donut shop earns $25,000 in total revenues per month with explicit costs of $12,000 and opportunity costs of $8,000. Your accounting profit is

Accepted Answer

A)  $45,000. 
B)  $13,000. 
C)  $33,000. 
D)  zero. 
A)  $45,000. 
B)  $13,000. 
C)  $33,000. 
D)  zero.

Economic profit is always

Superstars in sports or entertainment presumably would be willing to continue working in their specific areas for lower income than they are currently earning. This implies that

According to the random walk theory

A difference between a share of stock in a corporation and a corporate bond is that

Suppose your donut shop earns $25,000 in total revenues per month with explicit costs of $12,000 and opportunity costs of $8,000. Your accounting profit is

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Demand and Supply Elasticity

Consumer Choice

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters

Exam 21: Rents, Profits, and the Financial Environment of Business

Economic profit is always

Superstars in sports or entertainment presumably would be willing to continue working in their specific areas for lower income than they are currently earning. This implies that

According to the random walk theory

A difference between a share of stock in a corporation and a corporate bond is that

Suppose your donut shop earns $25,000 in total revenues per month with explicit costs of $12,000 and opportunity costs of $8,000. Your accounting profit is

The Nature of Economics

Scarcity and the World of Trade-Offs

Demand and Supply

Extensions of Demand and Supply Analysis

Public Spending and Public Choice

Funding the Public Sector

The Macroeconomy: Unemployment, Inflation, and Deflation

Measuring the Economys Performance

Global Economic Growth and Development

Real GDP and the Price Level in the Long Run

Classical and Keynesian Macro Analyses

Consumption, Real GDP, and the Multiplier

Fiscal Policy

Deficit Spending and the Public Debt

Money, Banking, and Central Banking

Domestic and International Dimensions of Monetary Policy

Stabilization in an Integrated World Economy

Policies and Prospects for Global Economic Growth

Demand and Supply Elasticity

Consumer Choice

The Firm: Cost and Output Determination

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly and Strategic Behavior

Regulation and Antitrust Policy in a Globalized Economy

The Labor Market: Demand, Supply and Outsourcing

Unions and Labor Market Monopoly Power

Income, Poverty, and Health Care

Environmental Economics

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

Filters