When an Economist States That a Firm Is Earning Zero

question 151

Multiple Choice

When an economist states that a firm is earning zero economic profit, this statement implies that the firm

• A) will be forced out of business unless market conditions change.
• B) is doing as well as it could in any other line of business.
• C) is earning a zero rate of return on its assets.
• D) could earn a higher rate of return in other industries.

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Definitions:

Mental Processes

are activities of the mind involved in thinking, understanding, learning, and remembering.

Executive Control Functions

Cognitive processes including planning, working memory, attention, problem solving, verbal reasoning, inhibition, mental flexibility, task switching, and initiation and monitoring of actions.

Practical Intelligence

A form of intelligence related to the ability to solve everyday problems by utilizing experience-based knowledge.

Gardner

Refers to Howard Gardner, a psychologist known for his theory of multiple intelligences, which suggests people have different kinds of intelligences.