Econ102 Exam #3

Generally, ______ motivate firms to enter an industry while ______ motivate firms to exit an industry. A. economic profits; economic losses B. accounting profits; accounting losses C. accounting profits; economic losses D. economic profits; accounting losses {Ans: A. economic profits; economic losses}_____________ work together to guide resources to their highest value. A. The explicit cost and the implicit cost of a profit maximizing firm B. The short run and long run supply curve C. The rationing and allocative functions of price D. The economic profit and accounting profit {Ans: C. The rationing and allocative functions of price}Once a monopoly firm has determined the quantity of output it wishes to sell, the price it can charge is determined by: A. the cost of making the product. B. the demand curve that the firm faces. C. market demand for the product minus cost. D. the explicit cost of making the product plus the implicit costs incurred by the firm owner. {Ans: B. the demand curve that the firm faces.}Suppose the market for coffee is in equilibrium at a price of $5 per pound. This means: A. all producers who want to sell coffee earn a profit. B. all potential