This quiz works best with JavaScript enabled. Home > Finance > Profit > Profit – Quiz 1 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Profit Quiz 1 (20 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. $ \frac{FC_{100}}{100}+\frac{VC_{100}}{100}$ Mary made 100 muffins in her bakery and used the formula above to calculate one of the costs associated with making the muffins. What is Mary calculating? A) Total cost. B) Average fixed cost. C) Marginal cost. D) Average total cost. Show Answer Correct Answer: D) Average total cost. 2. Average revenue (AR) is the same thing as A) Price per unit. B) TR/Output. C) The extra revenue received as a result of selling one more unit of output. D) Total revenue less marginal revenue. Show Answer Correct Answer: A) Price per unit. 3. Rent, Rates, Salaries, Plant and Machinery, should be considered as what ..... A) Variable costs. B) Total costs. C) Fixed costs. D) Average costs. Show Answer Correct Answer: C) Fixed costs. 4. A firm produces 400 toys and sells each toy for $ 10. If the explicit cost of producing the toys is $ 500 and the implicit cost is $ 1, 000, the firm's economic profit is A) $ 1, 000. B) $ 500. C) $ 0. D) $ 2, 500. Show Answer Correct Answer: D) $ 2, 500. 5. When demand is price elastic, a reduction in price leads to A) Increase in revenue. B) Increase in revenue initially, and a subsequent fall in the long run. C) Reduction in total revenue. D) Exit from the market. Show Answer Correct Answer: A) Increase in revenue. 6. Which of these comes from a factory? A) Toys. B) Bananas. C) Tomatoes. D) Apples. Show Answer Correct Answer: A) Toys. 7. Relative to a competitive industry with the same costs, a monopolist charges A) A higher price and produces more output. B) A lower price and produces more output. C) A higher price and produces less output. D) A lower price and produces less output. Show Answer Correct Answer: C) A higher price and produces less output. 8. What does it mean, "buy needs before wants?" A) To have a lot of money. B) To go to the nearest store. C) Buy the things you must have. D) To buy everything you would like. Show Answer Correct Answer: C) Buy the things you must have. 9. The Law of Diminishing Marginal ..... A) Returns. B) Excess. C) Margins. D) Profit. Show Answer Correct Answer: A) Returns. 10. In order to calculate marginal cost, producers must compare the difference in the cost of producing one unit to the cost of A) Purchasing a unit. B) Distributing that unit. C) Producing the next unit. D) Producing a different unit. Show Answer Correct Answer: C) Producing the next unit. 11. The slope of the total product of labour ( $ TP_L$ ) curve is the same as which of the following? A) The demand curve. B) The average product of labour ( $ AP_L$ ) curve. C) Total revenue curve. D) The marginal product of labour ( $ MP_L$ ) curve. Show Answer Correct Answer: D) The marginal product of labour ( $ MP_L$ ) curve. 12. If a business makes $ 85 dollars/day and spends $ 43 on explicit costs, what is their Accounting Profit? A) $ 43. B) $ 85. C) $ 128. D) $ 42. Show Answer Correct Answer: D) $ 42. 13. Which of the following does not illustrate the concept of normal profit? A) TR=TC. B) AR=AC. C) MR=MC. D) Zero Economic Profit. Show Answer Correct Answer: C) MR=MC. 14. ..... profit is when a Firm's total revenue is equal to it's Explicit & Implicit costs. A) Normal. B) Economic. C) Accounting. D) None of above. Show Answer Correct Answer: A) Normal. 15. There are actually two kinds of profit in economics-normal profit and supernormal profit. A) Yes, I understand this from the notes. B) No, I don't understand this from the notes. C) No, I don't understand this, as I have not read the notes. D) None of above. Show Answer Correct Answer: A) Yes, I understand this from the notes. 16. A woman recently quit her job as a teacher, which earned her $ 75/day, to become a tailor. She earns $ 85/day, during that day she spends a total of $ 25 on materials. What is her Economic Profit? A) $ 75. B) $ 15. C) -$ 75. D) -$ 15. Show Answer Correct Answer: D) -$ 15. 17. NORMAL PROFIT occurs when TR = TC A) Yes, I understand this from the notes. B) No, I don't understand this from the notes. C) No, I don't understand this, as I have not read the notes. D) None of above. Show Answer Correct Answer: A) Yes, I understand this from the notes. 18. To generate higher profits, producers must work to A) Increase their total supply. B) Increase their total expenses. C) Decrease their customer base. D) Decrease their production costs. Show Answer Correct Answer: D) Decrease their production costs. 19. An assortment of stocks and bonds sold together as an investment. Risk is reduced. A) Government Bond. B) Mutual Fund. C) Corporate Bond. D) Stock. Show Answer Correct Answer: B) Mutual Fund. 20. A firm produces 400 books and sells each book for $ 15. If the explicit cost of producing the books is $ 4, 500 and the implicit cost is $ 1, 000, the firm's economic profit is: A) $ 0. B) $ 500. C) $ 1, 000. D) $ 1, 500. Show Answer Correct Answer: B) $ 500. Next →Related QuizzesFinance QuizzesProfit Quiz 2Profit Quiz 3Profit Quiz 4Profit Quiz 5 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books