7A Web Quiz.docx

# 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
5) Define: Which graph shows the axes labelled correctly for a production function (total product-TP) graph?

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