Exam 9: Decision Making by Individuals and Firms

Suppose a local hardware store has explicit costs of $2 million per year and implicit costs of $44,000 per year.If the store earned an economic profit of $50,000 last year,this means that the store's accounting profit equaled:

It is not possible to earn an economic profit without also earning an accounting profit.

According to the profit-maximizing principle of marginal analysis,if the marginal benefit is _____ the marginal cost,_____.

If marginal costs remain constant,the marginal cost curve is:

The costs economists use in the concept of economic profit are:

Use the following to answer question: -(Table: Expected Exam Scores from Studying Economics and Accounting)Use Table: Expected Exam Scores from Studying Economics and Accounting.If you studied for a total of 3 hours,your combined scores would be maximized by spending _____ hours studying economics.

When a decision maker chooses the option leading to the outcome that he or she most prefers,he or she has made a _____ decision.

Ian is such a big Braves fan that his benefit of seeing a Braves game is $200.He pays $100 for a ticket to see one of their playoff games.Unfortunately,he left the ticket in his jeans when he laundered them and the ticket was destroyed.According to marginal analysis,Ian should:

To determine the quantity of any activity that will maximize total profit,economists employ the:

(Scenario: Accounting and Economic Profit)Use Scenario: Accounting and Economic Profit.What is the opportunity cost of Wang's $100,000 inheritance being used to start his business? Scenario: Accounting and Economic Profit Rather than put the $100,000 that his grandmother left him in a mutual fund that earns 5% each year,Tommy Wang quit his job,which paid $60,000 per year,and started Wang's Wicker Furniture Store.He rented a showroom for $20,000 for the year,purchased $60,000 in wicker furniture,and incurred costs of $40,000 for sales help and advertising.In his first year,his revenue was $150,000.

John's accountant tells him that he made a profit of $43,002 running a pottery studio in Orlando.John's wife,an economist,claims John lost $43,002 running his pottery studio.This means his wife is claiming that he incurred _____ in _____ costs.

The dormitories of Eastland College are part of its:

The implicit cost of capital is:

Use the following to answer question: -(Table: Marginal Benefit of Sweatshirts)Use Table: Marginal Benefit of Sweatshirts.The marginal benefit of producing the fifth sweatshirt is:

If a star college quarterback turns down a multimillion-dollar offer from the NFL to return for his senior year of college,he may be exhibiting:

Suppose Eastland College does not have a summer program and could rent out the campus to various summer sports camps for $100,000.The potential revenue of the summer camps represents a(n):

When a person makes a choice that is close to but not exactly the one that leads to the best possible economic outcome,he or she is:

Use the following to answer question: -(Figure: The Marginal Benefit Curve)Use Figure: The Marginal Benefit Curve.The total benefit of mowing seven lawns is approximately:

In economics,maximization of the total profit of an activity occurs when:

Sara spends $25 for an all-day ticket to an amusement park.After one ride,it begins to rain and she wishes she had never come.Since she has already paid for her ticket,she should stay at the amusement park until it closes or she has wasted her $25.