1.You are sick and tired of your old wardrobe. You decide to donate it to a charity of your choice. Your action

Group of answer choices

Creates wealth by moving the clothes from lower value use to higher value use

Destroys wealth since you lose your clothes

Creates wealth by making you feel richer

None of the given answer options is correct

2.The difference between the minimum price the producer is willing to accept and the price the producer actually receives for a product is referred to as:

Group of answer choices

market surplus.

market shortage.

consumer surplus.

producer surplus.

3.If you are willing to sell your car business for $500,000 and someone offers you $420,000 for it, this transaction will generate:

Zero surplus

$80,000 worth of seller surplus and unknown amount of buyer surplus

$40,000 worth of buyer surplus and $40,000 of seller surplus

4.Government intervention

can provide incentives to conduct business in an illegal black market

plays no role in generating wealth

is the best way to eliminate poverty

does not enforce property rights

$80,000 worth of buyer surplus and unknown amount of seller surplus

5.When the market is in equilibrium, with no government intervention,

Group of answer choices

Government maximizes total expenditure

Consumer surplus is maximized

Government maximizes total revenue

None of the given answer options is correct

6.A business incurs the following costs per unit: Labor$5/unit; Materials $3/unit and rent$5000/month. If the firm produces 1000 units a month, the total variable costs equals

Group of answer choices

$5,000

$8,000

$13,000

$10,000

7.Firm X is producing 1000 units, selling them at $15 each. Variable costs are $3 per unit and the firm is making an accounting profit of $3000. What is the firm's total variable costs?

Group of answer choices

$1000

$3000

$5,000

$7,000

8.You go to see a movie that you believe would turn out to be amazing. The ticket costs you $20. Once in the theatre you realize that the movie is awful. If you leave now, you can still catch your favorite TV show. What should you do?

Group of answer choices

Stay and watch the movie since you paid $20 for it

The ticket price is now a sunk cost, you can ignore it and go home

Stay and watch the movie since the opportunity cost of the movie is zero

None of the above

9.James used $200,000 from his savings account that paid an annual interest of 10% to purchase a hardware store. After one year, James sold the business for 300,000. His accounting profit is:

$300,000

$100,000

$80,000

$20,000

10.Total costs equal

Fixed costs

Variable costs

Sunk costs

Fixed costs plus variable costs