test 4

1. Which of the following is an implicit cost? (i) the owner of a firm forgoing an opportunity to earn a large salary working for a Wall Street brokerage firm (ii) interest paid on the firm's debt (iii) rent paid by the firm to lease office space

• (ii) and (iii)

• (i) and (iii)

• (i) only

• (iii) only

2. (Scenario 13-2) Zach took $400,000 out of the bank and used it to start his new cookie business. The bank account pays 3 percent interest per year. During the first year of his business, Zach sold 6,000 boxes of cookies for $2.50 per box. Also, during the first year, the cookie business incurred costs that required outlays of money amounting to $9,000. Zach's accounting profit for the year was

• $-494,000.

• $-6,000.

• $6,000.

• $12,000.

3. (Scenario 13-2) Zach took $400,000 out of the bank and used it to start his new cookie business. The bank account pays 3 percent interest per year. During the first year of his business, Zach sold 6,000 boxes of cookies for $2.50 per box. Also, during the first year, the cookie business incurred costs that required outlays of money amounting to $9,000. Refer to Scenario 13-2. Zach's economic profit for the year was

• $-506,000.

• $-6,000.

• $3,000.

• $6,000.

4. On a 100-acre farm, a farmer is able to produce 3,000 bushels of wheat when he hires 2 workers. He is able to produce 4,400 bushels of wheat when he hires 3 workers. Which of the following possibilities is consistent with the property of diminishing marginal product?

• The farmer is able to produce 5,600 bushels of wheat when he hires 4 workers.

• The farmer is able to produce 5,800 bushels of wheat when he hires 4 workers.

• The farmer is able to produce 6,000 bushels of wheat when he hires 4 workers.

• All of the above are correct.

5. Refer to Figure 13-6. Which of the curves is most likely to represent average total cost?

• A

• B

• C

• D

6. Refer to Figure 13-6. Which of the curves is most likely to represent average variable cost?

• A

• B

• C

• D

7. Refer to Figure 13-6. Which of the curves is most likely to represent marginal cost?

• A

• B

• C

• D

8. Refer to Table 13-7. What is the marginal cost of creating the tenth instructional module in a given month?

• $900

• $1,250

• $2,500

• $3,060

9. Refer to Table 13-7. What is the average variable cost for the month if six instructional modules are produced?

• $180.00

• $533.33

• $700.00

• $713.33

10. Refer to Table 13-7. What is the average fixed cost for the month if nine instructional modules are produced?

• $108.00

• $120.00

• $150.00

• $811.11