PCH 7

Any time you give up the opportunity to use the resource for something else there is only an explicit cost there is only an implicit cost there is only an average cost there is an opportunity cost

there is an opportnity cost

Being able to calculate ___ product average product and marginal product is important to operate efficiently and maximize profits.

total

The total amount of output produced with a given amount of resources is known as: marginal product. total revenue. total product. total cost.

total product

The price of a good times the quantity sold equals: economic costs. total revenue. accounting costs. economic revenue.

total revenue

Costs that change with the amount of output produced are ___ costs.

variable

ICosts that increase as production increases and decrease as production decreases are ___ costs.

variable

A person who has been managing a dry cleaning store for $30,000 per year decides to open her own dry cleaning store. The expenses are $35,000 for salaries (excluding the owner's), $10,000 for supplies, $8,000 for rent, $2,000 for utilities, and $5,000 for interest on a bank loan. The revenues of the store during the first year of operation are $100,000. The total economic profit is $___

1000

A person who has been managing a dry cleaning store for $30,000 per year decides to open her own dry cleaning store. The expenses are $35,000 for salaries (excluding the owner's), $10,000 for supplies, $8,000 for rent, $2,000 for utilities, and $5,000 for interest on a bank loan. The revenues of the store during the first year of operation are $100,000. The total accounting profit is $

40000

Monetary payments made by individuals, firms, and governments for the use of others' land, labor, capital, and entrepreneurial ability are _____ costs. a) total b) explicit c) economic d) implicit

B; explicit

The fixed cost per unit is equal to: average fixed cost. marginal cost. average variable cost. average total cost.

a

Which of the following is a way that firms can avoid paying fixed costs in the short run? Firms cannot avoid fixed costs in the short run. Firms can shut down and produce nothing. Firms can increase output. Firms can rely solely on salaried employees.

a

Total revenue minus the explicit cost of production is ___ profit.

accounting

otal revenue minus the explicit cost of production is _____ profit.

accounting

Total product divided by the number of units of a resource employed gives the ___ product of the resource

average

When there are diminishing marginal returns: the average product of the next unit of a variable resource utilized is less than that of the previous variable resource. the marginal product of the next unit of a variable resource utilized is less than that of the previous variable resource. the marginal product of the next unit of a variable resource utilized is more than that of the previous variable resource. the total product of the next unit of a variable resource utilized is less than that of the previous variable resource.

b

Which of the following is true of economic costs? a) Economic costs are defined as the sum of all explicit costs. b) Economic costs are defined as the sum of explicit and implicit costs. c) Economic costs are defined as the sum of all implicit costs. d) Economic costs are defined as the difference between explicit costs and implicit costs.

b

If a business owner can produce more as a whole with an additional worker even if the marginal product associated with that worker is lower than the marginal product associated with the previous worker then there are: negative marginal returns. zero marginal returns. increasing marginal returns. diminishing marginal returns.

diminishing marginal returns

Explicit costs are also known as ___ (direct/opportunity) costs.

direct

Total revenue minus the explicit and implicit costs of production is ___ profit.

economic

Zero accounting profit means that the value of _____ profit is negative. implicit explicit direct economic

economic

The costs associated with the use of resources are called: a) implicit costs. b) economic costs. c) explicit costs. d) accounting costs.

economic costs

The amount of output produced per unit of a resource employed is the ___ product.

employed

Positive economic profit encourage more firms to ___ (enter/exit) the market to produce goods and services.

enter

A firm incurs ___ costs when it pays for a factor of production at the same time that it uses it, whereas ___costs are the costs associated with a firm's use of resources that it owns.

explicit, implicit

___ costs are also known as accounting costs whereas ___ costs are the opportunity costs of using owned resources.

explicit; implicit

Costs that do NOT change with the amount of output produced are ___ costs.

fixed

Costs for which no monetary payment is explicitly made are ___ costs.

implicit

The opportunity costs of using owned resources are ___ costs.

implicit

To determine the true cost associated with the production of goods or services, ___ (implicit/average) costs should be taken into account.

implicit

Economic costs can be defined as the sum of _____ and _____ costs.

implicit; expicit

The additional output produced as a result of utilizing one more unit of a variable resource is the ___ product

marginal

The ___ costs of using owned resources are implicit costs.

opportunity

Any time you give up the opportunity to use the resource for something else a) there is only an explicit cost b) there is only an average cost c) there is an opportunity cost d) there is only an implicit cost

opportunity cost

A person who has been managing a dry-cleaning store for $30,000 per year decides to open his own dry cleaning store. The expenses are $35,000 for salaries (excluding the owner's) $10,000 for supplies, $8,000 for rent, $2,000 for utilities, and $5,000 for interest on a bank loan. The implicit costs include: salaries. rent. interest on the bank loan. utilities. the owner's forgone salary.

the owners forgon salary

A period of time in which at least one ___ of production is fixed is known as the short run.

input

A person who has been managing a dry cleaning store for $30,000 per year decides to open his own dry cleaning store. The expenses are $35,000 for salaries (excluding the owner's), $10,000 for supplies, $8,000 for rent, $2,000 for utilities, and $5,000 for interest on a bank loan. The explicit costs are $___

60,000

Monetary payments made by individuals, firms, and governments for the use of others' land, labor, capital, and entrepreneurial ability are _____ costs. a) implicit b) total c) economic d) explicit

c; explicit

The true cost of economic activity such as the production of goods and services must include: a) total revenue b) supply cost c) implicit cost d) demand cost

c; implicit cost

A company can break even and meet operating costs without a loss when it earns _____ economic profit. Multiple choice question. zero positive total negative

zero

Total cost equals total ___ cost plus total ___ cost.

fixed; variable

Increasing marginal returns is a characteristic of production whereby the marginal product of the next unit of a variable resource utilized is ___ (greater/smaller) than that of the previous variable resource.

greater

Being able to calculate total product average product and marginal product is important: for determining demand and supply. when filing taxes. to keep competition in check. to operate efficiently and maximize profits.

d

___ marginal returns are a characteristic of production whereby the marginal product of the next unit of a variable resource utilized is less than that of the previous variable resource.

decreasing

The variable cost curve, at each output level, falls: above the marginal cost curve by the amount of the total cost curve. above the total cost curve by the amount of the fixed cost curve. below the marginal cost curve by the amount of the total cost curve. below the total cost curve by the amount of the fixed cost curve.

d; total cost curve lies above variable cost curve with the difference being the amount of fixed costs