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Questions and Answers
What is the main difference between economic profit and normal profit?
What is the main difference between economic profit and normal profit?
- Economic profit is the profit earned in the short run, while normal profit is earned in the long run.
- Normal profit is the minimum profit required to stay in business, while economic profit is the excess. (correct)
- Economic profit is the profit needed to stay in business, while normal profit is the excess profit.
- Normal profit is the profit earned in the short run, while economic profit is earned in the long run.
What is the main characteristic of a neoclassical firm?
What is the main characteristic of a neoclassical firm?
- It is a single-product firm with a single objective of profit maximization. (correct)
- It has a complex and changing environment.
- It ignores the internal organization and has perfect information.
- It has multiple objectives, including growth and manager's utility.
According to New Institutional Economics, what is the conception of the firm?
According to New Institutional Economics, what is the conception of the firm?
- A firm with no role for the entrepreneur and no internal organization.
- A unit of decision-making with perfect information and rationality.
- A multi-product firm with multiple objectives and bounded rationality. (correct)
- A passive responder to market signals with no internal organization.
What is the main difference between a neoclassical firm and a real business firm?
What is the main difference between a neoclassical firm and a real business firm?
What is the paradox of profits in a competitive market?
What is the paradox of profits in a competitive market?
What is the main objective of a real business firm?
What is the main objective of a real business firm?
What is the origin of New Institutional Economics?
What is the origin of New Institutional Economics?
What is the characteristics of a real business firm in terms of information?
What is the characteristics of a real business firm in terms of information?
What is the main difference between a neoclassical firm and a real business firm in terms of the environment?
What is the main difference between a neoclassical firm and a real business firm in terms of the environment?
What is the role of the entrepreneur in a real business firm?
What is the role of the entrepreneur in a real business firm?
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