6) Normal profit differs from accounting profit because normal profit includes _____ as production costs. In general, normal profit is ____ than accounting profit. a) Both monetary and opportunity costs; lower b) Both monetary and opportunity costs; higher c) Only opportunity costs; lower d) Only monetary costs; higher

7) Suppose Sandy can work as a lawyer and earn an annual wage of $90,000. She chooses to open her own bakery and pays herself a monthly salary of $40,000. Which of the following is CORRECT? a) Her accounting profit will be necessarily negative b) Her accounting profit will be higher than her normal profit c) Her normal profit will be necessarily negative d) Her accounting profit will be lower than her normal profit

8) Why does a perfectly competitive industry allocate inputs or resources efficiently? a) The high degree of competition forces the firms to be efficient b) The market demand curve reflects how much the consumers value the product c) The market supply curve reflects the true cost of inputs d) All of the answers are correct

9) If firms manage to form a cartel, how would they set their supply decision? a) They set industry price equal to industry marginal cost b) They set industry marginal revenue equal to industry marginal cost c) It does not matter because a cartel always earns positive economic profits due to the lack of competition d) They set industry price equal to industry average total cost