A minimize its explicit B minimize its total C maximize its D maximize its total 1 Economists normally assume that the goal of a firm is to costs cost profit revenue 2 The amount of money that a firm receives from the sale of its output is called A total net profit B total gross profit C net revenue D total revenue 3 Total revenue equals A price x quantity total cost B output input C price quantity D price x quantity 4 Which of the following can be added to profit to obtain total revenue profit profit A capital B operational C net D total profit cost 5 If Danielle sells 300 wrist bands for 0 50 each her total revenues are A 600 B 150 C 299 50 D 300 6 Marcus sells 300 candy bars at 0 50 each His total costs are 125 His profits are A 25 B 124 50 C 150 D 125 7 Implicit costs opportunity cost a firm s profit by the firm variable costs 8 Which of the following is an example of an implicit cost A are not part of an economist s measurement of B do not enter into the economist s measurement of C do not require an outlay of money D are also known as 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 A i B iii only only only C ii and iii D i and iii A average total B accounting C economic D total only 9 Total revenue minus both explicit and implicit costs is called cost profit profit cost 10 Total revenue minus only explicit costs is called profit cost profit profit 11 Total revenue minus only implicit costs is called A implicit B average total C accounting D economic A accounting B opportunity C economic D None of the above is profit cost profit correct 12 Tom quit his 65 000 a year corporate lawyer job to open up his own law practice In Tom s first year in business his total revenue equaled 150 000 Tom s explicit cost during the year totaled 85 000 What is Tom s economic profit for his first year in business A 0 B 20 000 C 65 000 D 85 000 13 Scenario 1 Suppose that Abdul opens a coffee shop He receives a loan from a bank for 100 000 He withdraws 50 000 from his personal savings account The interest rate on the loan is 8 and the interest rate on his savings account is 2 Refer to Scenario 1 Abdul s explicit cost of capital is 1 000 2 000 4 000 A B C D 8 000 14 Refer to Scenario 1 Abdul s implicit cost of capital is A 1 000 B 2 000 C 8 000 D 4 000 15 Number of Workers Marginal Product Table 1 Total Output 0 0 1 2 3 4 5 30 45 60 50 40 Refer to Table 1 What is total output when 1 worker is hired A 30 B 45 C 75 D 10 16 Refer to Table 1 What is total output when 2 workers are hired A 120 B 15 C 45 D 75 17 Refer to Table 1 What is total output when 3 workers are hired A 135 B 105 C 60 D 15 18 Refer to Table 1 What is total output when 4 workers are hired A 185 B 135 C 10 D 50 19 Refer to Table 13 1 What is total output when 5 workers are hired 90 10 A B C 225 D 185 20 Numbe r of Worker s Table 2 Total Outp ut Marginal Product 0 1 2 3 4 0 300 500 600 650 Refer to Table 2 What is the marginal product of the first worker A 300 units B 100 units C 50 units D 200 units 21 Refer to Table 2 What is the marginal product of the second worker A 300 units B 50 units C 100 D 200 units units 22 If a production function shows declining marginal product of an input as the quantity of the input increases then the production function exhibits A diminishing profitability B decreasing marginal product C increasing marginal product D increasing returns to scale 23 Figure 2 Refer to Figure 2 The graph illustrates a typical frontier function A production possibilities B production C marginal product of labor D total cost curve curve 24 Which of the following costs do not vary with the amount of output a firm produces A average fixed costs B marginal costs and average fixed costs C fixed costs and average fixed costs D fixed costs 25 Fixed costs can be defined as costs that produced production production large enough 26 Sonia opened a yoga studio where she teaches classes and sells yoga clothing Fixed costs for Sonia s yoga studio include the cost of the A are incurred even if nothing is B vary inversely with C vary in proportion with D are incurred only when production is i tank tops ii wages paid to the other yoga instructors iii lease on the studio space iv insurance that the landlord requires Sonia to A i and ii carry for the studio only B iii and iv only only C i D i ii iii and iv 27 Sonia opened a yoga studio where she teaches classes and sells yoga clothing Variable costs for Sonia s yoga studio include the cost of the i tank tops ii wages paid to the other yoga instructors iii lease on the studio space iv insurance that the landlord requires Sonia to A i carry for the studio only only only B i and ii C iii and iv D i ii iii and iv 28 If a firm produces nothing which of the following costs will be zero cost cost cost cost 29 A variable B opportunity C total D fixed A fixed costs variable costs divided by B change in total costs divided by change in C fixed costs variable costs divided by change in D change in total costs divided by Average total cost equals quantity produced quantity produced quantity produced quantity produced 30 Variable cost divided by quantity produced is A average total cost B profit C marginal cost D None of the above is correct 31 Cindy s Car Wash has average variable costs of 2 and average total costs of 3 when it produces 100 units of output car washes The firm s total variable cost is A 100 B 200 C 300 D 500 32 Please turn in this part of this home on a separate sheet of paper Show all your work in order to get a full credit for this question Find all the missing letters Table 3 Quanti ty Total Cost The Flying Elvis Copter Rides Fixed Cost Variabl e Cost Margin al Cost 0 1 2 3 50 50 150 A G H N …