Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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1. According to the text, economic profit serves as a beacon to entrepreneurs. This means
a. A positive economic profit sends a warning to investors not to invest more.
b. A negative economic profit sends a signal to investors that it is time to invest more.
c. A zero economic profit sends a warning to investors not to invest more.
d. A positive economic profit attracts resources while a negative economic profit sends resources away.
e. None of the above.
2. The difference between economic profit and accounting profit is
a. Average costs
b. Direct costs
c. Economic costs
d. Variable costs
e. Marginal costs
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