If the Owners of a Business Are Receiving Total Revenue

question 2

Multiple Choice

If the owners of a business are receiving total revenue sufficient to cover all their explicit and implicit costs,they are

• A) earning positive economic profit.
• B) earning a normal profit.
• C) earning economic losses.
• D) doing better than their next-best alternative.
• E) doing worse than their next-best alternative.

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Definitions:

Earthquake Insurance

A type of property insurance policy that covers damage to buildings and personal property caused by seismic activities.

Utility Function

An equation that assigns a level of utility or satisfaction to each bundle of goods, allowing for comparisons of consumer preferences.

Probability

Probability is the measure of the likelihood that an event will occur, quantified as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.

Diversified Portfolios

Investment strategies involving a mix of assets (stocks, bonds, real estate, etc.) to reduce risk through diversification.