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ECON Micro Canadian 1st Edition McEachern Test Bank 1
ECON Micro Canadian 1st Edition McEachern Test Bank 1
MULTICHOICE
(A) because, over time, firms that do NOT earn profits will have difficulty securing financing to
survive
(D) because if a firm fails to earn a profit in its first year, it will go out of business
Answer : (A)
(A) salaries
Answer : (D)
3. Suppose Steve owns the building where his company operates. Which of the following scenarios
represents the opportunity cost of owning the building?
(D) Steve's usage of the building precludes him from renting to anyone else, thus there is an
opportunity cost.
Answer : (D)
Answer : (C)
5. Suppose the Ford Motor Company pays cash for the steel if uses to produce cars. What type of
cost is this?
Answer : (C)
6. What is the term for a firm's opportunity costs of using resources provided by the firm's owners?
Answer : (D)
Answer : (D)
Answer : (A)
(B) Explicit costs are the only cost considered in opportunity cost.
(D) Explicit costs are comprised of actual monetary payments for resources purchased.
Answer : (D)
11. Which term refers to the difference between a firm's total revenue and what must be paid to
attract resources from their best alternative use?
(B) utility
(D) cost
Answer : (C)
12. Opportunity cost is a concept that is utilized in calculating which of the following?
Answer : (C)
13. John had been renting office space in a building downtown, but he moved his office to the
carriage house he owns behind his house. How will his costs change?
(B) Explicit costs will rise, and implicit costs will fall.
(D) Explicit costs will fall, and implicit costs will rise.
Answer : (D)
14. A young chef is considering opening his own sushi bar. To do so, he would have to quit his
current job, which pays $30,000 a year, and take over a storefront space in a building that he owns
and currently rents to his brother for $12,000 a year. His expenses at the sushi bar would be
$70,000 for food and $5,000 for utilities. What would his explicit costs be?
(A) $42,000
(B) $75,000
(C) $105,000
(D) $117,000
Answer : (B)
15. A young chef is considering opening his own sushi bar. To do so, he would have to quit his
current job, which pays $30,000 a year, and take over a storefront space in a building that he owns
and currently rents to his brother for $12,000 a year. His expenses at the sushi bar would be
$70,000 for food and $5,000 for utilities. What would his implicit costs be?
(A) $30,000
(B) $42,000
(C) $75,000
(D) $105,000
Answer : (B)
16. Two friends, Diane and Sam, own and run a bar. Diane tends bar on Monday, Wednesday, and
Friday and receives a wage plus tips. Sam tends bar on Tuesday, Thursday, and Saturday and
receives only tips. Which of the following represents an implicit cost of operating the bar?
Inches. Lines.
Length (as far as complete) 17 6
Extreme width, from the outside of one ramus to that of the 9 0
other
Depth of each ramus 4 9
Length of alveolar series 4 8
From first molar to broken end of symphysis 6 0
Breadth of symphysis 3 7
Longitudinal extent of symphysis 4 6
Circumference of narrowest part of each ramus 5 9
DESCRIPTION OF A CONSIDERABLE PART OF
THE SKELETON OF A LARGE EDENTATE
MAMMAL, ALLIED TO THE MEGATHERIUM AND
ORYCTEROPUS, AND FOR WHICH IS PROPOSED
THE NAME OF
SCELIDOTHERIUM[44]
LEPTOCEPHALUM.