Quizizz--Economics (Module 3--Element 1.7)--Profit & Loss

How do profits influence business activities according to the text?

• They direct businesses toward wasteful activities.

• They guide businesses away from productive activities.

• They direct businesses toward productive activities that increase resource value.

• They have no impact on business activities.

What is the role of losses in business behavior as described in the text?

• Losses encourage businesses to invest more.

• Losses direct businesses away from wasteful activities.

• Losses have no effect on business decisions.

• Losses direct businesses away from activities that reduce resource value.

What is the difference between net income and economic profit according to the text?

• Net income includes opportunity costs, while economic profit does not.

• Economic profit includes opportunity costs, while net income does not.

• Both net income and economic profit exclude opportunity costs.

• Both net income and economic profit include opportunity costs.

What do producers need to do in a market economy to obtain resources?

• Pay less than the opportunity cost of the resources.

• Bid resources away from their alternative uses.

• Acquire resources without any payment.

• Use resources without considering their value.

What is the opportunity cost if a corporation invests $100 million in buildings and equipment instead of putting it in the bank at a 5% interest rate?

• $10 million

• $5 million

• $15 million

• $20 million

How is a firm's profit determined according to the text?

• Profit = Total Revenue + Total Cost

• Profit = Total Revenue - Total Cost

• Profit = Total Cost - Total Revenue

• Profit = Total Revenue x Total Cost

What must a firm do to earn a profit according to the text?

• Generate less revenue than the opportunity cost

• Generate more revenue than the opportunity cost

• Match the revenue with the opportunity cost

• Ignore the opportunity cost

What is the condition for consumers to purchase a good?

• The price must be lower than the production cost.

• They must value it as much or more than the price.

• The good must be available in large quantities.

• The good must be a necessity.

What is profit described as in the text?

• A penalty for inefficient production.

• A reward for transforming resources into something of greater value.

• A measure of consumer satisfaction.

• A result of high sales volume.

What happens when the total revenue from sales is less than the opportunity cost of the resources used?

• The business makes a profit.

• The business breaks even.

• The business incurs losses.

• The business gains market share.