Tackle the Test: Free-Response Questions

538

  1. Question

    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
    Your firm is selling 10,000 units of output at a price of $10 per unit. Your firm’s total explicit cost is $70,000. Your firm’s implicit cost of capital is $10,000, and your opportunity cost is $20,000.

    Rubric for FRQ 1 (5 points)

    1 point: Total revenue = $100,000

    1 point: Total implicit cost = $30,000

    1 point: Accounting profit = $30,000

    1 point: Economic profit = $0

    1 point: Because your firm earns normal profit, there is no better alternative use for your resources.

  2. Question

    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
    Sunny owns and operates Sunny’s Sno Cone Stand. Use the data in the table provided to answer the questions below.