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practice assignment for cahpter10.docx


Department
Economics
Course Code
ECON 1000
Professor
online
Study Guide
Quiz

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Exam
Name___________________________________
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1
A firm's goal is to
1)
_______
A)
maximize profit.
B)
maximize revenue.
C)
minimize risk.
D)
minimize costs.
E)
maximize cost while minimizing revenue.
2
A firm's total opportunity cost of production is the sum of the cost of using resources
2)
_______
A)
bought in the market.
B)
bought in the market, owned by the firm, and supplied by the firm's owner.
C)
supplied by the firm's owner.
D)
bought in the market and supplied by the firm's owner.
E)
owned by the firm.
3
The implicit rental rate
3)

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_______
A)
is the firm's opportunity cost of using the capital it owns.
B)
is paid with cash.
C)
has two components: economic depreciation and foregone interest.
D)
both A and C are correct.
E)
both B and C are correct.
4
Which one of the following statements about the implicit rental rate of capital is true?
4)
_______
A)
It is the market value of capital.
B)
It is the depreciated value of capital.
C)
It is the opportunity cost to a firm of using its own capital.
D)
It includes normal profit.
E)
It is the amount paid for the use of land or buildings.
5
The difference in the market value of a new car and the market value of the same car one year later is
5)
_______
A)
economic deterioration.
B)
conventional depreciation.
C)
physical deterioration.
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