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Economics (1,296)
ECN 104 (447)
Lecture

Sample Problems ch13.pdf

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School
Department
Economics
Course
ECN 104
Professor
Semester
Winter

Description
Chapter 13 1 What is the amount of money that a firm receives from the sale of its output called a total gross profit b total net profit c total revenue d net revenue2 Susan used to work as a telemarketer earning 25 000 per year She gave up that job to start a catering business In calculating the economic profit of her catering business how is the 25 000 income that she gave up counted in terms of the catering business a total revenue b opportunity costs c explicit costs d sunk costs3 What would be an example of an explicit cost of production a the cost of forgone labour earnings for an entrepreneur b the lost opportunity to invest in other capital markets when the money is invested in ones business c the cost of flour for a baker d the cost of training programs postponed indefinitelyScenario 131 Joe wants to start his own business The business he wants to start will require that he purchase a factory that costs 300 000 To finance this purchase he will use 100 000 of his own money on which he has been earning 10 percent interest per year In addition he will borrow 200 000 and he will pay 12percent interest per year on that loan 4 Refer to Scenario 131 For the first year of operation what is the explicit cost of purchasing the factory a 12 000 b 20 000 c 24 000 d 44 0005 Refer to Scenario 131 For the first year of operation what is the opportunity cost of purchasing the factory a 10 000 b 20 000 c 24 000 d 34 0006 What relationship does a production function measure a inputs and quantity of output b inputs and revenue c inputs and costs d inputs and profit7 What can the marginal product of labour be defined as a change in profitchange in labour b change in outputchange in labour
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