Revenue, Profit and Market Structures

Fill in the blank: Total Revenue = Price x _______.

• Quantity

• Price

• Cost

• Profit

Fill in the blank: Profit = Total Revenue - _______.

• Total Costs

• Net Income

• Gross Profit

• Operating Expenses

What type of costs do accountants look at?

• Implicit Costs

• Explicit Costs

• Both Explicit and Implicit Costs

Fill in the blank: Explicit costs are payments paid by firms for using the resources of others. Example: Rent, Wages, Materials, ________.

• Electricity Bills

• Internet Charges

• Office Supplies

• Insurance Premiums

What do economists examine in terms of costs?

• Only Explicit Costs

• Only Implicit Costs

• Both Explicit and Implicit Costs

What must be true for accounting profit if economic profit is zero?

• Accounting profit is greater than zero

• Accounting profit is equal to zero

• Accounting profit is less than zero

• Accounting profit is equal to implicit costs

A market with low barriers is known as:

• Monopoly

• Oligopoly

• Perfect competition

• Monopolistic competition

Assume every unit can be sold for $10. Which unit maximizes profit?

• Unit A

• Unit B

• Unit C

• Unit D

Use marginal analysis to explain why you should never produce 5 units.

• Because the marginal cost exceeds marginal revenue at 5 units.

• Because the marginal revenue exceeds marginal cost at 5 units.

• Because the total cost is minimized at 5 units.

• Because the total revenue is maximized at 5 units.

Should you produce if the additional cost of another unit is $5?

• Yes

• No