Question

1).   Which of the following is an explicit cost in Jim’s business venture?

• The interest Jim does not earn because he invested his savings in his business
• Jim’s normal profit
• The salary Jim could have earned at another job
• The wages Jim pays his workers
• Answer A, answer B, and answer D are correct.

2). The cost that a firm pays in money to hire a resource is referred to as a________ cost.

• Explicit
• Total
• Maximized
• Minimized
• Implicit

3).

Frank owns a hotdog stand. His variable costs for producing different quantity of hotdogs is displayed above. What is the average cost if he produces 30 hotdogs?

• $2.03
• $2.45
• $1.20
• $61.00

4).  The cost that does not change as output changes is

• Variable cost
• Marginal cost
• Total cost
• Fixed cost

5).

Paulette owns a pizza parlor. Her total cost schedule is in the above table. Her average total cost for producing 5 pizza is

• $8.00
• $6.00
• $79.00
• $15.80

6). A cost incurred in the production of a good or service and for which firm does not make a monetary payment, is referred to as_________ cost.

• An explicit
• A minimized
• An invisible
• A maximized
• An implicit

7).

Paulette owns a pizza parlor. Her total cost’s schedule is in the above table. Her marginal cost of producing a fifth pizza is

• $8
• $6
• $71
• $79

8).  An insurance agent rents a building and has a three-year lease. An increase in the rent for the building increases the agent’s

• Total variable cost and total cost.
• Total fixed cost and total variable cost.
• Total variable cost and average variable cost.
• Total fixed cost and average fixed cost.
• Total cost and average variable cost.

9).  Chuck owns a factory that produces leather footballs. His total fixed cost equaled $86,000 last year. His total cost equaled $286,000 last year. Hence chuck’s

• Total variable cost was zero.
• Incurred an economic loss.
• Total variable cost equaled $372,000.
• Total variable cost equaled $200,000.
• None of the above answers is correct.

10). The primary goal of a firms is to

• Promote fairness
• Make a quality product.
• Promote workforce job satisfaction.
• Increase its production.
• Maximize profit.

Answer 1

Ans 1 option D the wages jim pay to his workers is an explicit cost

Ans 2 option A Explicit cost

Ans 4 option D fixed cost does not change whether production increase or decrease

Ans 6 option E implicit cost is the cost for which firm don't need to pay outside the firm

Ans 8 option D total fixed cost and average fixed cost

Ans 9 option D total variable cost equalen $200,000 because total variable cost = total cost - total fixed cost

Ans 10 option E maximize profit .