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Unformatted text preview: Principles of Economics EC 201 Cal Poly Pomona Dr. Bresnock Fall, 2009 Quiz 6 (10 points) Choose the best answer to each question and mark it on your answer form. Use Scantron 815-E for this purpose. You must also write in explanations for each answer choice and provide a brief reason as to why the answer is correct or incorrect. Spaces have been allocated on the quiz for the purpose of either writing in or typing in your explanations. You must turn in your quiz with the explanations and your scantron to this quiz on Mon.., Nov. 23rd at class lecture . Use the following to answer Question 1: Use the following cost information for the Creamy Crisp Donut Company to answer the next question(s): Entrepreneur's potential earnings as a salaried worker = $50,000 Annual lease on building = $22,000 Annual revenue from operations = $380,000 Payments to workers = $120,000 Utilities (electricity, water, disposal) costs = $8,000 Entrepreneur's potential economic profit from the next best entrepreneurial activity = $80,000 Entrepreneur's forgone interest on personal funds used to finance the business = $6,000 1. Refer to the above data. Creamy Crisp's economic profit is: A) $150,000. B) $80,000. C) $230,000. D) $94,000. A) B) C) D) 2. The basic difference between the short run and the long run is that: A) all costs are fixed in the short run, but all costs are variable in the long run....
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- Fall '09