Exam 7: Analysis of Costs

If a firm uses $1 million worth of raw materials; pays wages of $500,000; rent of $100,000; and interest of $100,000, and sells its output for $2 million, its net earnings before taxes are:

Which of the following is typically not U-shaped?

Why is the average fixed cost curve not a U-shape?

The income statement is a statement of:

Use the following to answer questions : Figure 7-2 -In Figure 7-2, the minimum of the AC curve occurs:

Which of the following is true if marginal cost is above average variable cost as output rises?

Total cost divided by output, TC/q, equals AC.

A firm's MC curve:

Use the following to answer questions : Table 7-1 -What is AFC at Q = 5 in Table 7-1?

Use the following to answer questions : Figure 7-1 -Given the curve shown in Figure 7-1, the marginal product of labor will be maximized at:

At the quantity of output where average cost has reached its minimum level:

Depreciation measures:

Use the following to answer questions : Figure 7-1 -Given the curves shown in Figure 7-1, the marginal cost of the 3rd unit of output is:

Taxes payable on a company's balance sheet are:

Which of the following is not found in a balance sheet?

Both the balance sheet and the income statement indicate the flow of sales, cost, and revenue over the accounting period.

If AC is above MC, MC must be rising.

Net worth on a company's balance sheet is properly described as:

Use the following to answer questions : Figure 7-1 -Given the curves shown in Figure 7-1, the average variable cost of 3 units of output is:

If the total value of assets remains unchanged but the addition to retained earnings is positive, then total liabilities must have decreased.