Questions
62
According to profit maximization theory of the firm, management.
Answer: Output level which maximizes difference between the two
63
According to Simon if a firm fails to achieve its target initially results in:
Answer: Search behavior
64
It is the difference between total revenue and total economic cost
Answer: Net Profit
65
Which of the following issues is related to microeconomics?
Answer: The impact of oil prices on car production
66
The word economy comes from the Greek word for
Answer: "One who manages a household."
68
The opportunity cost of an item is
Answer: What you give up to get that item.
70
In the circular-flow diagram,
Answer: Households are sellers in the resource market.
71
In the circular-flow diagram,
Answer: Spending on goods and services flow from firms to households.
72
Scarcity is a condition that exists when
Answer: Resources are not able to meet the entire demand for a product.
73
One of the most important differences between a firm‟s economic profit and its accounting profit is the subtraction of:
Answer: Any implicit charges for the use of capital owned by the entrepreneur.
74
That profit functions as an incentive for innovation was among the key contributions to economic thought by:
Answer: Joseph Schumpeter.
76
In a circular flow model, the real variables are:
Answer: Both the goods and services produced and the resources that are used.
77
Income and revenues that are created within a country
Answer: Can leave that country when goods are imported
78
The three fundamental questions of economic organization are:
Answer: How, what, and for whom.
79
The ultimate effect of the "invisible hand" of Adam Smith is that, in a competitive economy, everyone:
Answer: Benefits if each acts in his/her own interest.
