10.1 The Firm and Its Economic Problem 1) A firm's goal is to A) maximize revenue. B) maximize cost while minimizing revenue. C) maximize profit. D) minimize costs. E) minimize risk.
10.1 The Firm and Its Economic Problem
1) A firm's goal is to
A) maximize revenue.
B) maximize cost while minimizing revenue.
C) maximize profit.
D) minimize costs.
E) minimize risk.
2) A firm's total
A) bought in the market.
B) owned by the firm.
C) supplied by the firm's owner.
D) bought in the market and supplied by the firm's owner.
E) bought in the market, owned by the firm, and supplied by the firm's owner.
3) The implicit rental rate
A) is the firm's opportunity cost of using the capital it owns.
B) is paid with cash.
C) has two components: economic depreciation and foregone interest.
D) both A and C are correct.
E) both B and C are correct.
4) Which one of the following is included in the implicit rental rate of capital?
A) economic depreciation
B) the cost of electricity
C) the cost of raw materials
D) the cost of low-skilled labour
E) the cost of heating
5) Which one of the following statements about the implicit rental rate of capital is true?
A) It is the market value of capital.
B) It is the opportunity cost to a firm of using its own capital.
C) It includes normal profit.
D) It is the amount paid for the use of land or buildings.
E) It is the
6) The difference in the market value of a new car and the market value of the same car one year later is
A) economic depreciation.
B) physical depreciation.
C) economic deterioration.
D) physical deterioration.
E) conventional depreciation.
7) Economic depreciation is
A) the same as depreciation calculated by an accountant.
B) equal to economic profit minus normal profit.
C) the change in the market value of capital over a given period.
D) the deterioration of the physical appearance of a capital.
E) paid in cash.
8) Marc bought a new car last year for $10,000. He can now sell the car for $8,500. To buy this year's model of the same car he would have to pay $11,000. What is the one-year amount of economic depreciation?
A) $2,500
B) $1,500
C) $1,000
D) $10,000
E) $3,500
9) Marc bought a new car last year for $10,000. He can now sell the car for $8,500. To buy this year's model of the same car he would have to pay $11,000. What is the implicit rental rate using the car for one year at a zero percent interest rate?
A) $2,500
B) $3,500
C) $1,000
D) $10,000
E) $1,500
10) Marc bought a new car last year for $10,000. He can now sell the car for $8,500. To buy this year's model he would have to pay $11,000. Marc also had to take out a $9,000 loan to buy the car, which had to be paid back in yearly installments of $3,300 per year over three years. What is the implicit rental rate of the first year's use of the car?
A) $2,800
B) $1,300
C) $1,800
D) $13,300
E) $4,800
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