Quiz 5.docx - Question1 1/1pts Bobusedtoearn$40,,...

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Question 1 1 / 1 pts Bob used to earn $40,000 per year in his job as a nurse, but he quit in order to open his  own pizza shop. Bob used $10,000 from his own savings account and borrowed  $200,000 more from his bank. The interest rate is 4%. In Bob’s first year of business he  earned $80,000 in revenue and the cost of ingredients (flour, tomato sauce, cheese,  etc.) was $67,000. For his first year of business, Bob’s accounting profit was _______,  and his economic profit was ______. Correct!    $5,000; - $35,400      - $35,000; - $5,000      $75,000; $40,400      $67,000; $115,400   Remember the difference between accounting profit and economic profit is in the way  costs are calculated. Accounting profit takes into account explicit costs only, whereas  economic profit considers both explicit and implicit costs.   Question 2 0 / 1 pts Economists assume that firms    maximize the quantity of output produced   Correct Answer  
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act as though they intend to make profit as large as possible     maximize both profit and the amount of output produced   You Answered    maximize total revenue   The best way to predict a firm’s behavior is to assume that they are maximizing profit.   Question 3 1 / 1 pts Labor Marginal Product 0 1 8 2 10 3 13 4 12 5 8 6 7 7 4 8 3 Consider the table above. If 4 workers are hired, how much output is produced?    4      12  
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   31   Correct!    43   Sum the marginal products up to L = 4.   Question 4 1 / 1 pts Bob’s Bakery can produce 35 loaves of bread per day when 5 workers are hired. When  6 workers are hired, 46 loaves of bread are produced per day, ceteris paribus. Bob pays his workers $10 per day. What is the marginal product of the sixth worker?
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