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110Q5 - College of Administrative Sciences Principles of...

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College of Administrative Sciences Dr Mohammed El-Sakka Principles of Microeconomics Quiz # 2 Name\ ------------------------------------------------------- Univ. No.\--------------------- Serial No.\ ------------------ .To the economist total cost includes: A) explicit and implicit costs, including a normal profit. B) neither implicit nor explicit costs. C) implicit, but not explicit, costs. D) explicit, but not implicit, costs. Answer: A An explicit cost is: A) omitted when accounting profits are calculated. B) a money payment made for resources not owned by the firm itself. C) an implicit cost to the resource owner who receives that payment. D) always in excess of a resource's opportunity cost. Answer: B Economic profits are calculated by subtracting: A) explicit costs from total revenue. B) implicit costs from total revenue. C) implicit costs from normal profits. D) explicit and implicit costs from total revenue. Answer: D The basic characteristic of the short run is that: A) barriers to entry prevent new firms from entering the industry.
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