When OPEC Raised the Price of Crude Oil in the 1970s,it

question 184

Multiple Choice

When OPEC raised the price of crude oil in the 1970s,it caused the

• A)supply of gasoline to decrease.
• B)quantity of gasoline demanded to decrease.
• C)equilibrium price of gasoline to increase.
• D)All of the above are correct.

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Definitions:

Accounting Profit

The total revenue of a firm minus the explicit costs directly associated with its operation, such as materials and labor, calculated according to standard accounting practices.

Implicit Cost

The opportunity cost equal to what a firm must give up in order to use resources it already owns for production, without direct payment.

Opportunity Cost

The loss of potential gain from other alternatives when one alternative is chosen.

Economic Profit

The difference between a firm's total revenues and its total costs, including both explicit and implicit costs.