9) An examph of an esplicit cost is AJ the cost of buying inventcey 181) the ren
ID: 1109533 • Letter: 9
Question
9) An examph of an esplicit cost is AJ the cost of buying inventcey 181) the rent an owner of a boetnes could charge on her building Cj tlhe salary the owner of a bueness could earn in bis ewoct best employment. t) dhe inteest a bainess ownes coulid eam on the money invested in the business 10) Economic profit A) accounting peodit minus expliit costs C) accounting peofit plus implicit costs U)eccounting profit minus implicit cols D) always greater than accouning profit 11) The rule for profit maximization tor all firms is to produce to the point at which marginal revenue equals CJ average c A) price B) marginal cast 1D) average revenu 12) A firn will shus down in the short run when A) marginal rewno: less man:inal cost. C) total reverus is less than sotal fisod cost D) botal revenoe ls less than total variable cost 5 9 10 11 Quantty Figure 810 13) lf the firn in Figure 8.10 is price taker facing a market price af S8, what is the peotit maximizing cutput? A)5 B) 9 C) 10 14) An example of a differentiated product would be a Delilcomputer. D)haatingo A) steel. B) wheat 15) Which of the following is the objective of economic dhoice? A) securing the most value froen unlimited resources 8) securing the most value from limited resources C) purchasing only the cheapest goods posibie D) purchasing only the highest quality goodsExplanation / Answer
9> the cost of buying inventory
Reason
An explicit cost is a direct payment made to others in the course of running a business, such as .wage, rent and materials.
10> accounting profit minus implicit cost
An economic profit is the difference between the revenue received from the sale of an output and the opportunity cost of the inputs used.
11> Marginal cost
This is a standard formula
12> total revenue is less than the total fixed cost
It is better to shut down in the short run if the fixed cost exceeds the revenue.
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