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implicit cost

1) Which of the following is an example of an implicit cost and kindly state why.
a) rent on a building b) the cost of fertilizer for a farmer c) the opportunity cost of funds

c) the cost of fuel and materials.

2) Jennifer owns a pig farm. last year she earned $39,000 in total revenue while incurring $38,000 in explicit costs. She could have earned $27,000 as a teacher. These are all her revenue and costs. Therefore Jennifer earned an

a) accounting profit of $1,000 but incurred an economic loss of $26,000
b) accounting profit $1,000 but incurred an economic loss of $65,000
c) acconting profit of $1,000 but incurred an economic loss of $38,000
d) econmic profit of $1,000.

3) Because the amount of labor a firm employes can be changed, the cost of labor is known as

A) minimum cost B) variable cost C) maximum cost D) fixed cost

4) If a firm does not produce any output, its

a) total fixed cost must be zero b) econo,ic profit must be positive c) total variable cost must be zero d) total costs must be zero

5) If I own a law enforcement training operation. I employ three trainers. The last trainer I hired increased my total cast bt $466 per wk. even though the trainer brought in only one new client. Hence I

a) total variable cost equals $466. b) marginal cost of the last client equals $466 c) marginal cost of the last worker equals $233 d) total variable cost equals $233.

Solution Preview

1) Which of the following is an example of an implicit cost and kindly state why.

c) the opportunity cost of funds

Because it is a cost which has not been actually incurred or no actual payment has been made. Implicit cost is a cost that is represented by lost opportunity in the ...

Solution Summary

Multiple Choice - Which of the following is an example of an implicit cost and kindly state why.

$2.19