1. A(An)------------- cost is incurred when an actual monetary payment is made. An

	explicit
	implicit
	positive
	expressed

2)Six months ago Lisa opened up a dry-cleaning business. Which of the following is an implicit cost related to the dry-cleaning business?

	Lisa previously worked as an accountant, earning $4,000 a month.
	Lisa usually eats two hamburgers a day, priced at $4 each.
	Lia paid $200 for the leather cleaner to clean leather coats.
	Lisa paid $100 for an outside laundry service to clean comfort

3) Economic profit is defined as the difference between total revenue and

	explicit costs.
	implicit costs.
	sunk costs.
	the sum of explicit and implicit costs

4)Consider the following information about a business Mrs. Wagner opened last year: price = $6, quantity sold = 15,000; implicit cost = $35,000; explicit cost = $60,000. What was Mrs. Wagner's economic profit?

	$55,000
	$5,000
	-$5,000
	$30,000

5)If a firm earns normal profit, then it has generated revenue

	equal to the sum of implicit and explicit costs
	greater than total opportunity costs.
	sufficient to cover explicit costs, but not implicit costs. d.
	sufficient to cover implicit costs, but not explicit costs.

6)Costs that do not change with output are called __________ costs.

	marginal
	average
	fixed
	variable

7)The short run is

	a period of time in which all inputs are fixed.
	a period of time in which all inputs are variable.
	a period of time in which some inputs are fixed.
	always less than a year.

8)The law of diminishing marginal returns holds for a situation in which

	all inputs are variable.
	all inputs are fixed.
	some inputs are variable and some inputs are fixed.
	all inputs are increased in the same proportion.

9)There are 30 students in a class. The average grade for 29 of the students is 87. The grade of the remaining student is 84. Given this student's grade, the average grade of the 30-student class will

	87.
	higher than 87.
	lower than higher than 87.
	84

10)In the long run,

	all costs are variable costs.
	all costs are fixed costs.
	here are no variable costs.
	b and c