Question

Graphically, isoquants have which of the following lines?

a.	A negative slope that bends inward	b.	A negative slope that bends outward
c.	A positive slope that bends outward	d.	A positive slope that bends inward

______________ is the principal objective of a firm.

a.	Minimizing cost	b.	Maximizing profits
c.	Maximizing production	d.	Maximizing revenues

An implicit cost can be exemplified by which of the following?

a.	A salary paid to a manager	b.	Wages paid to workers
c.	Employer contributions to a 401k plan	d.	The interest forgone on funds used to buy machines

_________ costs are opportunity costs that take the form of payments to suppliers.

a.	Indirect	b.	Fixed
c.	Implicit	d.	Explicit

Answer 1

Answer
1.b. A negative slope that bends outward
Isoquants represent the combination of quantities that can be produced by the firm.

2 b. Maximizing profits
The firms main objective to to earn the highest level of profits possible. This is a assumption of a firm bein rational.

3.d. The interest forgone on funds used to buy machines
The interest forgone is an opportunity cost, which is a part of implicit cost.

4.c.Implicit
Implicit costs are costs which the firm forgoes and not a cost which affects directly in the firms performance

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