Question

Which of the following is NOT considered an explicit cost?

Question 11 options:

a)	electricity

b)

rent

c)	building insurance

d)	depreciation on equipment

Profits are equal to the difference between _____ and _____.

Question 12 options:

a)	total revenue; total costs

b)	total revenue; explicit costs

c)	total revenue; marginal costs

d)	marginal revenue; marginal costs

Walmart is able to order huge quantities of shovels and rakes at very low prices from many different factories in China as it opens more stores. This best represents:

Question 15 options:

a)	long-run economies of scale.

b)	economies of scope.

c)	short-run economies of scale.

d)

long-run diseconomies of scale.

David earns three hits in the first baseball game, one hit in the second game, and five hits in the third. What was his average number of hits based on these three games?

Question 16 options:

a)

3

b)

5

c)

4

d)

2

In the long run:

Question 18 options:

a)

TC = FC.

b)

TC = VC.

c)	average fixed cost is important.

d)

all costs are fixed.

Which statement is NOT true?

Question 19 options:

a)	Economic profits cannot be measured by accounting methods.

b)	Normal profits are the same as accounting profits.

c)	Normal profits are equal to zero economic profits.

d)	Economic profits are always lower than accounting profits.

Answer 1

1> d> depreciation on equipment

Reason

An explicit cost is a direct payment made to others in the course of running a business, such as wage, rent and materials, as opposed to implicit costs, which are those where no actual payment is made.

2> a> total revenue; total costs

Reason

This is true by definition

3> a> long-run economies of scale.

Reason

The opening of stores happens slowly.

4> a> 3

Reason

The average number of hits will be (3+1+5)/3=3