CHAPTER 7-8 PRETESTS QUESTIONS
WITH CORRECT ANSWERS 2026
$52,000. - correct answer-
A young chef in considering opening his own sushi bar. To do so, would have to quit his current job, w
hich pays $20,000 a year, and take over a store building that he owns and currently rents to his brothe
r for $6,000 a year. His expenses at the sushi bar would be $50,000 for food and $2,000 for gas and el
ectricity. What are his explicit costs?
a. $26,000.
b. $66,000.
c. $70,000.
d. $52,000.
e. $72,000.
The firm owner's time. - correct answer-Which of the following is not an explicit cost?
a. Salaries.
b. Sales taxes.
C. Utilities, such as gas and electricity.
d. Insurance.
e. The firm owner's time.
implicit cost. - correct answer-
The amount of money that could have been made by renting a piece of land to be used for building an
office building instead of using the land for employee parking is a(n):
a. implicit cost.
b. accounting cost.
c. explicit cost.
d. pure economic cont.
, less than accounting profit if implicit costs are greater than zero. - correct answer-Economic profit is:
a. always less than zero.
b. never less than accounting profit.
C. less than accounting profit if implicit costs are zero.
d. less than accounting profit if implicit costs are greater than zero.
zero economic profit. - correct answer-An economist left her $100,000-a-
year teaching position to work full-
time in her own consulting business. In the first year, she had total revenue of $200,000 and business
expenses of $100, 000. She made a (an):
a. economic profit.
b. economic Ioss.
C. implicit profit.
d. accounting loss, but not an economic loss.
e. zero economic profit.
All of the above. - correct answer-Which of the following is an example of a fixed input?
a. The acreage of a farmer's land.
b. Machinery.
c. The size of a firm's plant.
d. All of the above.
can be changed as output changes. - correct answer-Variable inputs are defined as any resource that:
a. varies with the size of the firm's plant.
b. cannot be changed as output changes.
WITH CORRECT ANSWERS 2026
$52,000. - correct answer-
A young chef in considering opening his own sushi bar. To do so, would have to quit his current job, w
hich pays $20,000 a year, and take over a store building that he owns and currently rents to his brothe
r for $6,000 a year. His expenses at the sushi bar would be $50,000 for food and $2,000 for gas and el
ectricity. What are his explicit costs?
a. $26,000.
b. $66,000.
c. $70,000.
d. $52,000.
e. $72,000.
The firm owner's time. - correct answer-Which of the following is not an explicit cost?
a. Salaries.
b. Sales taxes.
C. Utilities, such as gas and electricity.
d. Insurance.
e. The firm owner's time.
implicit cost. - correct answer-
The amount of money that could have been made by renting a piece of land to be used for building an
office building instead of using the land for employee parking is a(n):
a. implicit cost.
b. accounting cost.
c. explicit cost.
d. pure economic cont.
, less than accounting profit if implicit costs are greater than zero. - correct answer-Economic profit is:
a. always less than zero.
b. never less than accounting profit.
C. less than accounting profit if implicit costs are zero.
d. less than accounting profit if implicit costs are greater than zero.
zero economic profit. - correct answer-An economist left her $100,000-a-
year teaching position to work full-
time in her own consulting business. In the first year, she had total revenue of $200,000 and business
expenses of $100, 000. She made a (an):
a. economic profit.
b. economic Ioss.
C. implicit profit.
d. accounting loss, but not an economic loss.
e. zero economic profit.
All of the above. - correct answer-Which of the following is an example of a fixed input?
a. The acreage of a farmer's land.
b. Machinery.
c. The size of a firm's plant.
d. All of the above.
can be changed as output changes. - correct answer-Variable inputs are defined as any resource that:
a. varies with the size of the firm's plant.
b. cannot be changed as output changes.
