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:

Nonmyelinated Axons

Axons that lack a myelin sheath, causing them to conduct nerve impulses more slowly than myelinated axons.

Fast Nerve Fibers

Nerve cells that transmit signals rapidly, involved in the processing of information that requires quick responses, such as sharp, immediate pain or motor coordination.

Pain Sensations

The unpleasant sensory and emotional experience associated with actual or potential tissue damage or described in terms of such damage.

Distract

The act of diverting attention away from a primary focus or task, leading to a decrease in concentration or performance.