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ECON 201 Exam Questions with Answers 100% Verified Correct|
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ECON 201 Exam Questions with Answers 100%Verified Correct|
I'MaPizzaCo. produces and sells specialty pizzas. Last year, it produced 8,000 mushroom,
sausage and spinach pizzas and sold each one for $8. To produce these 8,000 specialty pizzas,
the company incurred variable costs of $24,000 and a total cost of $40,000. I'MaPizzaCo's
average fixed cost to produce 8,000 specialty pizzas was
A. $3.00
B. $2.00
C. $1.80
D. $1.60 - ✔✔B. $2.00
The marginal cost curve is generally ______________, because diminishing marginal returns
implies that additional units are ________________________.
A. downward-sloping; more costly to produce
B. upward-sloping; more costly to produce
C. downward-sloping; less costly to produce
D. upward-sloping; less costly to produce - ✔✔B. upward-sloping; more costly to produce
Which of the following should typically be ignored because spending has already been made
and cannot be changed?
A. variable costs
B. sunk costs
C. marginal costs
D. average marginal costs - ✔✔B. sunk costs
,When __________________ exist, doubling of all inputs will result in more than doubling
output, which means __________________________________________.
A. economies of scale; a larger factory can produce at a lower average cost than a smaller
company.
B. economies of scale; a smaller factory can produce at a lower average cost than a larger
company.
C. low labor inputs; larger scale of production leads to higher costs.
D. labor inputs; economies-of-scale curve is U-shaped. - ✔✔A. economies of scale; a larger
factory can produce at a lower average cost than a smaller
company.
The economies-of-scale curve is a long-run average cost curve, because
A. it allows all factors of production to change.
B. fixed costs cannot be changed.
C. only variable costs are allowed to change.
D. only marginal costs are allowed to change - ✔✔A. it allows all factors of production to
change.
Accounting profit is ________.
A. revenue minus explicit costs
B. revenue minus implicit costs
C. revenue plus explicit costs
D. revenue plus implicit costs - ✔✔A. revenue minus explicit costs
Lebron James giving up his salary playing professional basketball to open up a taco stand is
an example of an ________.
A. explicit cost
B. implicit cost
, C. explicit revenue
D. implicit revenue - ✔✔B. implicit cost
The cost of purchasing an oven for a pizza shop is an example of a ________.
A. fixed cost
B. variable cost
C. revenue-maximizing cost
D. cost-push inflation cost - ✔✔A. fixed cost
Pita Pan produces delicious pita sandwiches. Last month, it produced 1000 sandwiches and
sold each one for $5. To produce these 1000 sandwiches, the company incurred variable costs
of
$2000 and a fixed cost of $1000. Pita Pan's total revenue was _________.
A. $3
B. $5000
C. one million dollars
D. $3000 - ✔✔B. $5000
Brewed Awakening is a coffee shop selling extra-caffeinated coffee. Last month, it produced
10,000 cups of coffee and sold each one for $6. To produce these 10,000 cups of coffee, the
company incurred variable costs of $40,000 and a fixed cost of $10,000. The owner of Brewed
Awakening also is an expert at knitting blankets and could have made $20,000 last month
selling
blankets. Brewed Awakening's accounting profits are _________.
A. positive $60,000
B. positive $10,000
C. negative $10,000
D. $0 - ✔✔B. positive $10,000
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