Economics of Enterprise Answers

More of a commodity will be purchased at lower prices because A. Consumers substitute this commodit6y for others whose price has not changed. B. At lower prices, consumers can purchase more of this commodity with a given money income. C. More consumers will buy the commodity at lower prices than at higher prices. D. All of the above.

In an election year, weather it’s national, state or local, make a list of what is promised to the electorate will require funding (money) to carry out?

what effect wil the value of firm have when a new competitor enters the market

9. An increase in market supply and decrease in market demand will result in A. A decrease in equilibrium price and an increase in equilibrium quantity. B. A decrease in equilibrium price – the change in equilibrium quantity is indeterminate. C. An increase in equilibrium quantity – the change in equilibrium price is indeterminate. D. A decrease in equilibrium price and quantity.

 Many owners of small businesses do not pay themselves a salary. What effect will this practice have on the calculation of the firm’s accounting profit? Economic profit? Explain.

Last year Chloe quit her $60,000 per year job as a web-page designer for a leading computer software company to buy a small hotel on Saranac Lake. The purchase price of the hotel was $300,000, which she financed by selling a tax-free municipal bond that earned 5.5% per year Chloe’s total operating expenses and revenues were $100,000 and $200,000, respectively.

    a. Calculate Chloe’s accounting profit.

    b. Calculate Chloe’s economic profit.

Suppose the price of Good A changes to P20.00 from P18.00. Due to price change, the quantity demand of its related good which is Good B also declines from 50 units to 40 units. Compute for the cross-price elasticity of demand and determine if what type of good and elasticity