Question 1

What is the term for the surplus that is earned over and above all explicit and implicit costs of doing business?

Accepted Answer

A) Net profits. 
B) Marginal profits. 
C) Economic profits. 
D) Normal profits. 
A) Net profits. 
B) Marginal profits. 
C) Economic profits. 
D) Normal profits.

Question 2

If a firm is making economic profits,then it must also be making normal profits.

Accepted Answer

A) True 
 B)False

Question 3

Below are some financial data for the Do Drop In convenience store.
   The owners have put $40,000 into the business and they worked a total of 80 hours during the week.Savings accounts are currently paying 5.2% interest and the going wage rate is $8 per hour.
-Refer to the information above to answer this question.What are the week's total implicit costs for the Do Drop In?

Accepted Answer

A) $40. 
B) $680. 
C) $6,300. 
D) $6,900. 
E) $7,580. 
A) $40. 
B) $680. 
C) $6,300. 
D) $6,900. 
E) $7,580.

Question 4

Total product and total output are the same thing.

Accepted Answer

A) True 
 B)False

Question 5

-What could have caused the average total cost curve to decrease from ATC1 to ATC2?

Accepted Answer

A) The price of the product has decreased. 
B) The price of a variable input has decreased. 
C) Average product has decreased. 
D) Average variable costs have increased. 
E) Average fixed costs have increased. 
A) The price of the product has decreased. 
B) The price of a variable input has decreased. 
C) Average product has decreased. 
D) Average variable costs have increased. 
E) Average fixed costs have increased.

Question 6

-Refer to the graph above to answer this question.At what output is marginal product at the maximum point?

Accepted Answer

A) 40. 
B) 70. 
C) 80. 
D) 90. 
A) 40. 
B) 70. 
C) 80. 
D) 90.

Question 7

-Refer to the information above to answer this question.What is marginal cost when output is 50?

Accepted Answer

A) $4. 
B) $5. 
C) $6. 
D) $60. 
A) $4. 
B) $5. 
C) $6. 
D) $60.

Question 8

"Fill in the blank" in the table below and then answering the question below.
  
-Refer to the information above to answer this question.What is total variable cost when output is 3?

Accepted Answer

A) Zero. 
B) $3. 
C) $18. 
D) $29. 
E) $39. 
A) Zero. 
B) $3. 
C) $18. 
D) $29. 
E) $39.

Question 9

"Fill in the blank" in the table below and then answering the question below.
  
-Which of the following statements regarding total fixed costs is correct?

Accepted Answer

A) When total fixed costs are graphed,the curve will rise from the origin at a constant rate. 
B) When total fixed costs are graphed,the curve will be horizontal. 
C) Total fixed costs equal total variable cost less total average costs. 
D) Total fixed costs rise slowly at first,but then more quickly as output increases. 
E) Total fixed costs equal total marginal costs plus total variable costs. 
A) When total fixed costs are graphed,the curve will rise from the origin at a constant rate. 
B) When total fixed costs are graphed,the curve will be horizontal. 
C) Total fixed costs equal total variable cost less total average costs. 
D) Total fixed costs rise slowly at first,but then more quickly as output increases. 
E) Total fixed costs equal total marginal costs plus total variable costs.

Question 10

What is significant about the level of output at which marginal product begins to decline?

Accepted Answer

A) It is the point of maximum average product. 
B) It is the point of minimum average cost. 
C) It is the point at which the division of labour begins. 
D) It is the point at which diminishing returns begins. 
A) It is the point of maximum average product. 
B) It is the point of minimum average cost. 
C) It is the point at which the division of labour begins. 
D) It is the point at which diminishing returns begins.

Question 11

What is the significance of the minimum point on the marginal cost curve?

Accepted Answer

It is the point where diminish

Question 12

Which of the following statements is true concerning economic profits?

Accepted Answer

A) They are always positive. 
B) They are equal to profits as measured by an accountant. 
C) They are always zero. 
D) They are revenue over and above all costs including implicit costs. 
A) They are always positive. 
B) They are equal to profits as measured by an accountant. 
C) They are always zero. 
D) They are revenue over and above all costs including implicit costs.

Question 13

What is the term for the period of time in which at least one input in the production process is fixed?

Accepted Answer

A) Fixed run. 
B) Variable run. 
C) Long run. 
D) Short run. 
A) Fixed run. 
B) Variable run. 
C) Long run. 
D) Short run.

Question 14

What is the term for the costs that come from the use of the owner's own resources and therefore are not actually paid out in money?

Accepted Answer

A) Sunk costs. 
B) Explicit costs. 
C) Implicit costs. 
D) Depreciation. 
A) Sunk costs. 
B) Explicit costs. 
C) Implicit costs. 
D) Depreciation.

Question 15

The diagram below shows the production function for Clean-Like-New car wash business.
Number of Washed Cars

Accepted Answer

@#IMG-DLM& 
(a)Compute the total product,marginal

Question 16

Which of the following is a variable cost?

Accepted Answer

A) The leasehold cost of a building. 
B) Insurance on the factory's physical plant. 
C) Raw materials. 
D) The cost of a marketing research report. 
A) The leasehold cost of a building. 
B) Insurance on the factory's physical plant. 
C) Raw materials. 
D) The cost of a marketing research report.

Question 17

Which of the following is a fixed cost?

Accepted Answer

A) Electricity to power the production process. 
B) Insurance on the factory's physical plant. 
C) Raw materials. 
D) Wages paid to labour. 
A) Electricity to power the production process. 
B) Insurance on the factory's physical plant. 
C) Raw materials. 
D) Wages paid to labour.

Question 18

Label each of the following cost curves.

Accepted Answer

The answer of Label each of the following cost curves....

Question 19

Below are some financial data for the Do Drop In convenience store.
   The owners have put $40,000 into the business and they worked a total of 80 hours during the week.Savings accounts are currently paying 5.2% interest and the going wage rate is $8 per hour.
-What are sunk costs?

Accepted Answer

A) Costs that are implicit and are not actually paid out in money. 
B) The historical costs of buying machinery and equipment which have no current resale value. 
C) The annual cost of wear and tear on machinery and equipment. 
D) Costs that are actually paid out in money. 
A) Costs that are implicit and are not actually paid out in money. 
B) The historical costs of buying machinery and equipment which have no current resale value. 
C) The annual cost of wear and tear on machinery and equipment. 
D) Costs that are actually paid out in money.

Question 20

You are given that the average variable cost of producing 25 units of output is $4 and the total cost is $200.Calculate VC,FC,ATC,and AFC.

Accepted Answer

VC = AVC*Q = $4*25 = $100.
FC

What is the term for the surplus that is earned over and above all explicit and implicit costs of doing business?

If a firm is making economic profits,then it must also be making normal profits.

Total product and total output are the same thing.

-What could have caused the average total cost curve to decrease from ATC₁ to ATC₂?

-Refer to the graph above to answer this question.At what output is marginal product at the maximum point?

-Refer to the information above to answer this question.What is marginal cost when output is 50?

"Fill in the blank" in the table below and then answering the question below. -Refer to the information above to answer this question.What is total variable cost when output is 3?

"Fill in the blank" in the table below and then answering the question below. -Which of the following statements regarding total fixed costs is correct?

What is significant about the level of output at which marginal product begins to decline?

What is the significance of the minimum point on the marginal cost curve?

Which of the following statements is true concerning economic profits?

What is the term for the period of time in which at least one input in the production process is fixed?

What is the term for the costs that come from the use of the owner's own resources and therefore are not actually paid out in money?

The diagram below shows the production function for Clean-Like-New car wash business. Number of Washed Cars

Which of the following is a variable cost?

Which of the following is a fixed cost?

Label each of the following cost curves.

Below are some financial data for the Do Drop In convenience store. The owners have put $40,000 into the business and they worked a total of 80 hours during the week.Savings accounts are currently paying 5.2% interest and the going wage rate is $8 per hour. -What are sunk costs?

You are given that the average variable cost of producing 25 units of output is $4 and the total cost is $200.Calculate VC,FC,ATC,and AFC.

The Economic Problem

Demand and Supply: An Introduction

Demand and Supply: An Elaboration

Elasticity

Consumer Choice

Costs in the Long Run

Perfect Competition

An Evaluation of Competitive Markets

Monopoly

Imperfect Competition

The Factors of Production

International Trade

Filters

Exam 6: A Firms Production Decisions and Costs in the Short Run

What is the term for the surplus that is earned over and above all explicit and implicit costs of doing business?

If a firm is making economic profits,then it must also be making normal profits.

Total product and total output are the same thing.

-What could have caused the average total cost curve to decrease from ATC1 to ATC2?

-Refer to the graph above to answer this question.At what output is marginal product at the maximum point?

-Refer to the information above to answer this question.What is marginal cost when output is 50?

"Fill in the blank" in the table below and then answering the question below. -Refer to the information above to answer this question.What is total variable cost when output is 3?

"Fill in the blank" in the table below and then answering the question below. -Which of the following statements regarding total fixed costs is correct?

What is significant about the level of output at which marginal product begins to decline?

What is the significance of the minimum point on the marginal cost curve?

Which of the following statements is true concerning economic profits?

What is the term for the period of time in which at least one input in the production process is fixed?

What is the term for the costs that come from the use of the owner's own resources and therefore are not actually paid out in money?

The diagram below shows the production function for Clean-Like-New car wash business. Number of Washed Cars

Which of the following is a variable cost?

Which of the following is a fixed cost?

Label each of the following cost curves.

Below are some financial data for the Do Drop In convenience store. The owners have put $40,000 into the business and they worked a total of 80 hours during the week.Savings accounts are currently paying 5.2% interest and the going wage rate is $8 per hour. -What are sunk costs?

You are given that the average variable cost of producing 25 units of output is $4 and the total cost is $200.Calculate VC,FC,ATC,and AFC.

The Economic Problem

Demand and Supply: An Introduction

Demand and Supply: An Elaboration

Elasticity

Consumer Choice

Costs in the Long Run

Perfect Competition

An Evaluation of Competitive Markets

Monopoly

Imperfect Competition

The Factors of Production

International Trade

Filters

-What could have caused the average total cost curve to decrease from ATC₁ to ATC₂?