MODULE 52: Defining Profit

Printed Page 537(cont.)

Tackle the Test: Multiple-Choice Questions

Question

Which of the following is an example of an implicit cost of going out for lunch?
A.
the amount of the tip you leave the waiter
B.
the total bill you charge to your credit card
C.
the cost of gas to drive to the restaurant
D.
the value of the time you spent eating lunch
E.
all of the above

Which of the following is an example of an
Question

Which of the following is an implicit cost of attending college?
A.
tuition
B.
books
C.
laptop computer
D.
lab fees
E.
forgone salary

Which of the following is an
Question

Which of the following is the best definition of accounting profit? Accounting profit equals total revenue minus depreciation and total
A.
explicit cost only.
B.
implicit cost only.
C.
explicit cost plus implicit cost.
D.
opportunity cost.
E.
explicit cost plus opportunity cost.

Which of the following is the best definition of accounting profit? Accounting profit equals total revenue minus depreciation and total
Question

Which of the following is considered when calculating economic profit but not accounting profit?
A.
implicit cost
B.
explicit cost
C.
total revenue
D.
marginal cost
E.
All of the above are considered when calculating accounting profit.

Which of the following is considered when calculating economic profit but not accounting profit?
Question

You sell T-shirts at your school’s football games. Each shirt costs $5 to make and sells for $10. Each game lasts two hours and you sell 100 shirts per game. You could always be earning $8 per hour at your other job. Which of the following is correct? Your accounting profit from selling shirts at a game is
A.
$1,000 and your economic profit is $500.
B.
$500 and your economic profit is $1,000.
C.
$500 and your economic profit is $484.
D.
$484 and your economic profit is $500.
E.
$500 and your economic profit is also $500.

You sell