This is a redo of a test for extra credit ULTIPLECHOICE. Choose the one alternat

Question

This is a redo of a test for extra credit ULTIPLECHOICE. Choose the one alternative that best completes the 1) A cost paid in money is statement or answers the not an opportunity cost. n explicit cost but not an opportunity cost. n explicit cost and an opportunity cost. an implicit cost and an opportunity cost E) not an accounting cost. 2) Interest is considered ain) A) explicit cost when the firm pays a bank to borrow money mplicit cost when the irm owner uses his or her own funds to buy capital. Cheturn to entrepreneurship if the firm owner uses her own funds to buy capital form of depreciation if the cost of borrowing increases. E) Both answers A and B are true. She started her own 3) April quit her job as an accountant at Ernst and Young, where she was paid $45,000per year. Shes landscaping business. She rents machi 00 and pays stoo aswages toher help. These are tools for $50,000 and pays $ 10,000 as wages to her help. These are her only April earned total revenue of$100,000 has an economic loss. Her accountant calculates her profit as $40,000. Her explicit cost is $105,000. th answers A and B are correct. h answers A and C are correct 4) The short run is less than one year Bhe time frame in which some resources are fixed. ) a time frame short enough so that some costs are explicit costs. ) the time frame in which output is fixed. time frame in which all resources are fixed. 5) The long run is a time period in which A) all of the firm's resources are fixed B) some of the firm's resources are fixed. C) all costs become explicit costs. diefirme the firm cannot increase its output. E)all of the firm's resources are variable an 6) At the Punjab Bakery, two workers can decorate 14 cakes in an hour and three workers can decorate 18 cakes in hour. The marginal product of the third worker is A) 6 cakes, and the average product for three workers is also 6 cakes. 9 cakes and is equal to the average product cakes, and the average product for three workers is 6 cakes. D) 18 cakes, and the average product for three workers is 6 cakes E) 32 cakes, and the average product for three workers is 9 cakes. The law of decreasing returns states that as a firm uses more of a xed input and a variable input, the marginal product of the fixed input and the marginal product of the variable input both decrease B) fixed input, with a given quantity of variable inputs, the marginal product of the fixed input eventually decreases. variable input, output will begin to fall immediately D)variable input, with a given quantity of fixed inputs, the marginal product of the variable input eventually decrease variable input, total output will increase indefinitely 8) In the short run, a firm cannot change the amount of capital it uses. Therefore the cost of capital is a A) short-run cost. B) marginal cost. variable cost Dlixed cost. productivity cost

Explanation / Answer

1. C. An explicit cost and an opportunity cost

2. E Both A and B are true

3. D Both Answer A and B are correct

4. B time frame in which some resources are fixed.

5. E All of the firms resources are variable

6. C , 4 cakes and the average product is 6.

7. D. Variable Inputs with a given quantity of fixed inputs

8 D. Fixed Cost

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