ECON QUIZ CHAPTER 7 AND 13 QUESTIONS AND ANSWERS.

ECON QUIZ CHAPTER 7 AND 13 QUESTIONS AND ANSWERS
Pete owns a shoe-shine business. Which of the following costs would be implicit costs?



(i)



shoe polish



(ii)



rent on the shoe stand



(iii)



wages Pete could earn delivering newspapers



(iv)



interest that Pete's money was earning before he spent his savings to set up the shoe-shine business



a: (i) and (ii) only

b: (iv) only

c: (iii) and (iv) only

d: (i), (ii), (iii), and (iv) - CORRECT ANSWER✅✅c: (iii) and (iv) only



When calculating a firm's profit, an economist will subtract only

a.

explicit costs from total revenue because these are the only costs that can be measured explicitly.

b.

, implicit costs from total revenue because these include both the costs that can be directly measured as
well as the costs that can be indirectly measured.

c.

the opportunity costs from total revenue because these include both the implicit and explicit costs of
the firm.

d.

the marginal cost because the cost of the next unit is the only relevant cost. - CORRECT ANSWER✅✅c



1. A production function is a relationship between inputs and

a.

quantity of output.

b.

revenue.

c.

costs.

d.

profit. - CORRECT ANSWER✅✅a



1. The marginal product of labor is equal to the

a.

incremental cost associated with a one unit increase in labor.

b.

incremental profit associated with a one unit increase in labor.

c.

increase in labor necessary to generate a one unit increase in output.

d.

increase in output obtained from a one unit increase in labor.

ANS: D - CORRECT ANSWER✅✅d