1|Page
IVY SOFTWARE MBA PREPWORKS FUNDAMENTALS OF
ECONOMICS EXAM LATEST 2026 ACTUAL EXAM WITH COMPLETE
QUESTIONS AND CORRECT DETAILED ANSWERS (100% VERIFIED
ANSWERS) |ALREADY GRADED A+| ||PROFESSOR VERIFIED||
||BRANDNEW!!!||
The accountants hired BBB law firm have calculated that at the
profit maximizing quantity total fixed costs equal $56,272,000 total
variable costs equal $213,235,000 and total revenue equals
$213,236,000. Because of this information BBB law firm decides
A. to exit the industry
B. to shut down
C. decides to stay open because shutting down would be more
expensive
D. decides to stay open because they are making an economic
profit - ANSWER-C. decides to stay open because shutting down
would be more expensive. Because total variable cost is less than
total revenue, BBB Law Firm should stay open.
The accountants hired by Truscott and Associates have
calculated that at the company's current production level, total
fixed costs to equal $21,000, total variable costs to equal $42,000
,2|Page
and total revenue to equal $45,000. Because of this information
Truscott & Associates decide
A) to exit the industry
B) to shut down
C) to stay open because shutting down would be more expensive
D) to stay open because they are making an economic profit -
ANSWER-C. to stay open because shutting down would be more
expensive
The profit maximizing rule states that a business maximizes
profits when it produces where marginal revenue equals average
variable cost. T/F - ANSWER-False
Real Gross Domestic Product (GDP) - ANSWER-a measure of
the market value of the production of the final goods and services
after an adjustment has been made for changes in the price level
= Nominal GDP / Price level index * 100
The National Income Identity - ANSWER-the accounting concept
which states that, in a time period, aggregate expenditure on
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wages, interest, rents, and profits is equal to nominal GDP is
equal to consumption spending, investment spending,
government spending, and net exports. The cycle depicted in a
circular flow diagram graphically depicts the national income
identity.
Aggregate expenditure is a measure of nominal GDP and it is
also known as the national income identity
The Consumer Price Index (CPI) - ANSWER-measures changes
over time in the cost of buying a "market basket" of goods and
services purchased by a typical family
calculated and reported by the Bureau of Labor Statistics (BLS)
it is reported monthly as a % change in consumer prices over the
previous month. (aka inflation rate)
The Producer Price Index (PPI) - ANSWER-measures the change
over time in the cost of buying a "market basket" of inputs
purchased by producers
, 4|Page
Inflation Rate - ANSWER-a percentage change in a price index
between two periods
Unemployment Rate - ANSWER-defined as the percent of people
who do not want a job right now, have been looking for work, but
have not found a job that they would take divided by the labor
force
macroeconomics - ANSWER-offers a set of tools and concepts
that both economists and policy makers use to try to figure out the
overall pulse of the economy
The term "gross" in GDP means that - ANSWER-the data are not
adjusted for depreciation- a term that represents the reduction in
market value of economic capital as it slowly wears out and
approaches the end of its useful life.
Net domestic product - ANSWER-the calculation of GDP which
adjusts for depreciation
IVY SOFTWARE MBA PREPWORKS FUNDAMENTALS OF
ECONOMICS EXAM LATEST 2026 ACTUAL EXAM WITH COMPLETE
QUESTIONS AND CORRECT DETAILED ANSWERS (100% VERIFIED
ANSWERS) |ALREADY GRADED A+| ||PROFESSOR VERIFIED||
||BRANDNEW!!!||
The accountants hired BBB law firm have calculated that at the
profit maximizing quantity total fixed costs equal $56,272,000 total
variable costs equal $213,235,000 and total revenue equals
$213,236,000. Because of this information BBB law firm decides
A. to exit the industry
B. to shut down
C. decides to stay open because shutting down would be more
expensive
D. decides to stay open because they are making an economic
profit - ANSWER-C. decides to stay open because shutting down
would be more expensive. Because total variable cost is less than
total revenue, BBB Law Firm should stay open.
The accountants hired by Truscott and Associates have
calculated that at the company's current production level, total
fixed costs to equal $21,000, total variable costs to equal $42,000
,2|Page
and total revenue to equal $45,000. Because of this information
Truscott & Associates decide
A) to exit the industry
B) to shut down
C) to stay open because shutting down would be more expensive
D) to stay open because they are making an economic profit -
ANSWER-C. to stay open because shutting down would be more
expensive
The profit maximizing rule states that a business maximizes
profits when it produces where marginal revenue equals average
variable cost. T/F - ANSWER-False
Real Gross Domestic Product (GDP) - ANSWER-a measure of
the market value of the production of the final goods and services
after an adjustment has been made for changes in the price level
= Nominal GDP / Price level index * 100
The National Income Identity - ANSWER-the accounting concept
which states that, in a time period, aggregate expenditure on
,3|Page
wages, interest, rents, and profits is equal to nominal GDP is
equal to consumption spending, investment spending,
government spending, and net exports. The cycle depicted in a
circular flow diagram graphically depicts the national income
identity.
Aggregate expenditure is a measure of nominal GDP and it is
also known as the national income identity
The Consumer Price Index (CPI) - ANSWER-measures changes
over time in the cost of buying a "market basket" of goods and
services purchased by a typical family
calculated and reported by the Bureau of Labor Statistics (BLS)
it is reported monthly as a % change in consumer prices over the
previous month. (aka inflation rate)
The Producer Price Index (PPI) - ANSWER-measures the change
over time in the cost of buying a "market basket" of inputs
purchased by producers
, 4|Page
Inflation Rate - ANSWER-a percentage change in a price index
between two periods
Unemployment Rate - ANSWER-defined as the percent of people
who do not want a job right now, have been looking for work, but
have not found a job that they would take divided by the labor
force
macroeconomics - ANSWER-offers a set of tools and concepts
that both economists and policy makers use to try to figure out the
overall pulse of the economy
The term "gross" in GDP means that - ANSWER-the data are not
adjusted for depreciation- a term that represents the reduction in
market value of economic capital as it slowly wears out and
approaches the end of its useful life.
Net domestic product - ANSWER-the calculation of GDP which
adjusts for depreciation
