2024 -2025 PRINCIPLES OF MICROECONOMICS 3e By OPENSTAX 170 QUE STIONS WITH CORRECT VERIFIED ANSWERS 100% TOP SCORE 1. The amount of money that a firm receives from the sale of its output is called: total revenue 2. Total revenue equals: total output multiplied by price per unit of output 3. Explicit costs: require an outlay of money by the firm 4. Which of the following is an implicit cost? (i) the owner of a firm forgoing an opportunity to earn a large salary working for a Wall Street brokerage firm (ii) interest paid on the firm's debt (iii) rent paid by t he firm to lease office space a. (ii) and (iii) b. (i) and (iii) c. (i) only d. All of the above are correct: c. (i) only 5. John owns a shoe -shine business. His accountant most likely includes which of the following costs on his financial statements? a. Wages John could earn washing windows b. Dividends John's money was earning in the stock market before John sold his stock and bought a shoe -shine booth c. The cost of shoe polish D. All of the above are correct: c. The cost of shoe polish 6. The amount of money that a wheat farmer could have earned if he had planted barley instead of wheat is: an implicit cost 7. Economic profit is equal to (i) Total revenue - (explicit costs + implicit costs) (ii) Total revenue - opportunity costs (iii) Accounting profit + im plicit costs: (i) and (ii) 8. Accounting profit is equal to (i) Total revenue - implicit costs (ii) Total revenue - opportunity costs (iii) Economic profit + implicit costs: (iii) only 9. Economic profit : will never exceed accounting profit 10. Economists normally assume that t he goal of a firm is to: maximize its profit 11. A production function is a relationship between : inputs and quantity of output 12. The marginal product of labor is equal to the: increase in output obtained from a one unit increase in labor 13 one would expect to observe diminishing marginal product of labor when - : crowded office space reduces the productivity of new workers 14. Which of these assumption is often realistic for s firm in the short run? a. The firm can vary both the size of its factory and the number of workers it employs b. The firm can vary the size of its factory, but not the number of workers it employs c. The firm can v ary the number of workers it employs, but not the size of its factory d. The firm can vary neither the size of its factory not the number of workers it employs: c. The firm can vary the number of workers it employs, but not the size of its factory 15. For a certa in firm, the number of workers hired is the only variable input. When this firm's production function is illustrated on a graph ?: the number of workers is measured on the horizontal axis and the quantity of output is measured on the vertical axis 16. When a fi rm's only variable input is labor, then the slope of the production function measures the: marginal product of labor 17. Let L represent the number of workers hired by a firm, and let Q represent that firm's quantity of output. Assume two points on the firm's production function are (L = 12, Q = 122) and (L = 13, Q = 132). Then the marginal product of the 13th worker is a. 8 units of output. b. 10 units of output. c. 122 units of output.
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