7A Web Quiz.docx - (7A Web Quiz 1 If the economic profit is...

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(7A Web Quiz) 1) If the economic profit is zero then: Ans: The accounting profit is greater than zero. 2) The following is cost information for Mary’s Ski Shop (owned by Mary) Total Revenue=$100,000 Rent and Utilities= $10,000 Spending on Inventory= $40,000 Payments to Workers= $30,000 Mary was offered $50,000 to work at Joe’s Ski Shop What are Mary’s accounting profits? Ans: $20,000
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3) The following is cost information for Mary’s Ski Shop (owned by Mary) Total Revenue=$100,000 Rent and Utilities= $10,000 Spending on Inventory= $40,000 Payments to Workers= $30,000 Mary was offered $50,000 to work at Joe’s Ski Shop What are Mary’s economic profits? Ans: -$30,000 (Economic loss) 4) The following is cost information for Mary’s Ski Shop (owned by Mary) Total Revenue=$100,000 Rent and Utilities= $10,000 Spending on Inventory= $40,000 Payments to Workers= $30,000 Mary was offered $50,000 to work at Joe’s Ski Shop Assuming nothing changes, should Mary stay in business and keep her ski shop? Ans: No, because she could make $30,000 more at Joe’s Ski Shop
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5) Define: Which graph shows the axes labelled correctly for a production function (total product-TP) graph?
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