Question

Question 1

An entrepreneur decided to leave a job that pays $50,000 a year to start a business. These lost wages would be considered ______________ .  

Select the correct answer below:

economic profit

an explicit cost

an implicit cost

accounting profit

2-If Sara's Taco shop brings more dollars in than the dollars it pays out, what is this called

explicit profit

accounting profit

implicit profit

economic profit

Question 3

Variable inputs are those items that __________________.

cannot be broken until they expire

change annually according to pre-establish terms

are contractually bound and cannot easily be replaced

can easily be increased or decreased in a short period of time

4-What is the best definition for "factor payments?"

:

Factor payments are what the firm pays for the use of the supply of production.

Factor payments are what the firm pays for the use of the factors of production input.

Factor payments are what the firm pays for the use of the factors of production.

Factor payments are what the firm pays for the use of supply costs.

Answer 1

1. An entrepreneur decided to leave a job that pays $50,000 a year to start a business. These lost wages would be considered an implicit cost. The implicit costs are not actually paid but are imputed.
2. If Sara's Taco shop brings more dollars in than the dollars it pays out, what is this called Accounting Profits. The accounting profits consider only the actually paid out costs and revenues earned.
3. Variable inputs are those items that can easily be increased or decreased in a short period of time. These inputs vary with the level of output produced.
4. Factor payments are what the firm pays for the use of the factors of production. The factors of production include land, labor, capital and entrepreneur. The cost incurred on these include rent, wages, interest and profits