Paul\'s accountant will most likely includes which of the following costs on his
ID: 1250815 • Letter: P
Question
Paul's accountant will most likely includes which of the following costs on his financial statements?Paul owns a car wash.A) dividends Paul’s money was earning in the stock market before Paul sold his stock and bought a car wash
B) All of the given answers are correct.
C) the cost of cleaning supplies
D) wages Paul could earn washing windows
2.
Farmer Jack decided to use his land to grow corn rather than use it to grow vegetables, the amount of money that he gave up by not growing vegetable is
A) forgone accounting profit.
B) an explicit cost.
C) an implicit cost.
D) an accounting cost
3.
Intel sold 2 million chips at a price of $10 per chip. For last year, the firm’s
A) explicit costs amounted to $20 million.
B) accounting profit amounted to $20 million.
C) economic profit amounted to $20 million.
D) total revenue amounted to $20 million.
4.
Mandy earned $40,000 per year in her Sales Manager job. She quit her job in order to start her own catering business. To buy the necessary equipment, she withdrew $20,000 from her savings, (which paid 3 percent interest) and borrowed $30,000 from her uncle, whom she pays 3 percent interest per year. Last year she paid $25,000 for ingredients and had revenue of $60,000. She asked Louis the accountant and Greg the economist to calculate her profit for her.
A) Louis says her profit is $35,000 and Greg says she lost $5,000.
B) Louis says her profit is $34,100 and Greg says she lost $6,500.
C) Louis says her profit is $33,500 and Greg says her profit is 33,500.
D) Louis says her profit is $34,100 and Greg says her profit is $6,500.
5.
In the short run
A) The firm can vary the size of its factory, but not the number of workers it employs.
B) The firm can vary neither the size of its factory nor the number of workers it employs.
C) The firm can vary both the size of its factory and the number of workers it employs.
D) The firm can vary the number of workers it employs, but not the size of its factory.
6.
If a firm’s production function is shown on a graph and the number of workers hired is the only variable input, then
A) total cost is measured on the horizontal axis and the number of workers is measured on the vertical axis.
B) the number of workers is measured on the horizontal axis and the quantity of output is measured on the vertical axis.
C) the number of workers is measured on the horizontal axis and variable cost is measured on the vertical axis.
D) the number of workers is measured on the horizontal axis and profit is measured on the vertical axis.
7.
marginal cost is
A) The amount by which total cost rises when the firm produces one additional unit of output.
B) is calculated the same way as average cost
C) total cost minus fixed cost.
D) The amount of total cost divided by units of output.
8.
If a firm is at the efficient scale of output it means that the quantity of output is such that it
A) maximizes marginal product.
B) maximizes profit.
C) minimizes average total cost(ATC) and average variable cost is equal to ATC
D) minimizes average total cost (ATC)and marginal cost is equal to the ATC
9.
When marginal cost is less than average total cost,
A) average total cost is rising.
B) average variable cost must be falling.
C) average total cost is falling.
D) marginal cost must be falling.
10.
Regarding a the firm's cost of production,which of the following statements is false?
A) Marginal cost is independent of fixed costs.
B) In the long run, there are no fixed costs.
C) Diminishing marginal product explains increasing marginal cost.
D) Economies of scale is a short-run concept.
Explanation / Answer
1. C) the cost of cleaning supplies 2. C) an implicit cost. (Corn isn't a vegetable?) 3. D) total revenue amounted to $20 million. 4. B) Louis says her profit is $34,100 and Greg says she lost $6,500. 5. D) The firm can vary the number of workers it employs, but not the size of its factory. 6. B) the number of workers is measured on the horizontal axis and the quantity of output is measured on the vertical axis. 7. A) The amount by which total cost rises when the firm produces one additional unit of output. 8. B) maximizes profit. 9. B) average variable cost must be falling. 10. D) Economies of scale is a short-run concept.