Exhibit 10-7 in the Long Run, the Firm in Exhibit

question 140

Multiple Choice

Exhibit 10-7 In the long run, the firm in Exhibit 10-7 can expect

• A)to earn an economic profit of $760
• B)earn an economic profit of $950
• C)earn zero economic profit
• D)earn an economic profit of $990
• E)suffer a loss of $1, 000

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Definitions:

Bearer Instrument

A negotiable financial instrument that designates payment to whoever holds or bears the instrument at the time of payment, with no need to prove ownership.

Bearer Instrument

A type of negotiable instrument (such as a bond or check) that is payable to whomever has possession of the instrument, making them the owner.

Order Instrument

A financial document that is payable to a specific person or entity and can be transferred by endorsement or delivery.

Traveler's Check

A preprinted, fixed-amount check designed to allow the person signing it to make an unconditional payment to someone else as a result of having paid the issuer for that privilege.