Beginning with a Specific Set of Observations and Using Them

question 63

Multiple Choice

Beginning with a specific set of observations and using them to create a theory to explain what was observed is:

• A)inductive theory
• B)deductive theory
• C)deterministic theory
• D)string theory
• E)quantitative theory

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Definitions:

Economic Profit

The difference between a firm's total revenues and its opportunity costs, representing the additional gain over what could have been earned in the next best alternative.

Normal Profit

The minimum level of earnings needed for a company to remain in business, often considered as the company's opportunity cost.

Break Even

The juncture where the aggregate of all costs matches the total income, leading to neither a profit nor a loss.

Short Run

A period of time during which at least one of a firm's inputs is fixed.