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Economics Model Answers Thirteen (view source)
Revision as of 17:46, May 20, 2007
, 17:46, May 20, 2007no edit summary
8. The term “normal profit” means “zero economic profits,” which occurs when total revenue equals explicit costs (like cash expenditures) plus implicit costs (like opportunity costs of wasted time). In Figure B (attached), at point A, what kind of profits does the company have: (a) more than a “normal profit”, (b) equal to a “normal profit” or (c) less than a “normal profit.”? Explain.
8. The term “normal profit” means “zero economic profits,” which occurs when total revenue equals explicit costs (like cash expenditures) plus implicit costs (like opportunity costs of wasted time). In Figure B (attached), at point A, what kind of profits does the company have: (a) more than a “normal profit”, (b) equal to a “normal profit” or (c) less than a “normal profit.”? Explain.
'''Less than a normal profit because at point A the price is below ATC.'''
9. Do you support “free trade” or “protectionism”? Explain your view.
9. Do you support “free trade” or “protectionism”? Explain your view.
'''Protectionism because although free trade may appear to have immediate short run benefits for consumers in lower costs for goods, it also imposes long run costs in weakening our industries and strengthening our nation's enemies.'''
===Honors:===
===Honors:===