1. Last year Christine worked as a consultant. She hired an administrative assistant for $16,500 per year and rented office space (utilities included) for $2,700 per month. Her total revenue for the year was $130,000. If Christine hadn't worked as a consultant, she would have worked at a real estate firm earning $55,000 a year.

Last year, Christine's explicit costs were ______, and her implicit costs were ______.

Multiple Choice

A. $16,500; $57,700

B. $32,400; $185,000

C. $19,200; $55,000

D. $48,900; $55,000

2. Adam Smith's theory of the invisible hand posits that the most efficient allocation of resources is often achieved by

Multiple Choice

A. reducing economic inequality.

B. government intervention in the market.

C. collective action.

D. the actions of independent, self-interested buyers and sellers.

3. A single-priced, profit-maximizing monopolist: multiple choice

A. causes excess demand, or shortages, by selling too few units of a good or service.

B. chooses the output level at which marginal revenue begins to increase.

C. always charges a price above the marginal cost of production.

D. also maximizes marginal revenue.

E. None of the statements is true.