After watching the Cost Analysis video lecture, consider the question(s) below. Then “submit” your response.
True
<<feedback>>Incorrect. Because economic profit includes both explicit costs (paid to another economic entity) and implicit costs (the opportunity cost, not otherwise captured, of resources supporting the business), this example would produce a loss ($100,000 − $50,000 − $60,000 = −$10,000).
<<*>>False
<<feedback>>Good job! Because economic profit includes both explicit costs (paid to another economic entity) and implicit costs (the opportunity cost, not otherwise captured, of resources supporting the business), this example would produce a loss ($100,000 − $50,000 − $60,000 = −$10,000).
True
<<feedback>>Incorrect. Because this business is recovering at least a portion of its fixed costs by selling the excess factory, the fixed costs associated with the factory are not a sunk cost. Sunk costs are not recoverable.
<<*>>False
<<feedback>>Right! Because this business is recovering at least a portion of its fixed costs by selling the factory, the fixed costs associated with the factory are not a sunk cost. Sunk costs are not recoverable.
<<*>>True
<<feedback>>Right answer! The marginal cost for a unit of output is the additional cost the firm incurs to produce that additional unit.
False
<<feedback>>Incorrect. The marginal cost for a unit of output is the additional cost the firm incurs to produce that additional unit