QUESTION 1
Before Jeff finally decided to take a job as a telephone salesperson, he was also considering taking a job as a housekeeper on Heron Island Research Station.
Which of the following statements is true?
As a rational decision-making individual and thinking like an economist, Jeff would only be concerned with his accounting profits.
The wage Jeff could have earned as a housekeeper, after taking the telephone salesperson job,is an implicit cost.
If Jeff is earning an economic profit now as a telephone salesperson, compared to being a housekeeper, then he must have failed to cover his opportunity cost.
The wage Jeff could have earned as a housekeeper is a sunk cost.
If the telephone sales market is perfectly competitive, then Jeff would be able to set the price he charges.
QUESTION 2
Crackerjack Chicken is a local fast food chain in Toowoomba that is looking to expand its market. They have recently opened a store in Brisbane and are earning $8,000/day, with explicit costs of $3,000/day. The opportunity cost of opening the store in this location is considered to be $3,000/day.
Which of the following statements are true:
Crackerjack Chicken'simplicitcostfor the Brisbane store is$3,000/day.
Crackerjack Chicken'sBrisbanestore is earning a normal profit.
Crackerjack Chicken'sBrisbane store is earning an economic profit of$2,000/day.
Crackerjack Chicken'sBrisbane store is earning an accounting profit of$2,000/day.

QUESTION 3
Hamish currently owns an avocado farm which in the past has been highly profitable with revenues of $75,000/year.Recently, a large storm killed his trees and destroyed a large amount of his specialised avocado farming equipment.Costs are estimated to be at least $30,000 to replace the specialised equipment.He is trying to decide whether to replant new avocado trees or to plant orange trees instead.
Select the item from the list provided to make the following statements true.

Question

QUESTION 1

Before Jeff finally decided to take a job as a telephone salesperson, he was also considering taking a job as a housekeeper on Heron Island Research Station.

Which of the following statements is true?

As a rational decision-making individual and thinking like an economist, Jeff would only be concerned with his accounting profits.
The wage Jeff could have earned as a housekeeper, after taking the telephone salesperson job,is an implicit cost.
If Jeff is earning an economic profit now as a telephone salesperson, compared to being a housekeeper, then he must have failed to cover his opportunity cost.
The wage Jeff could have earned as a housekeeper is a sunk cost.
If the telephone sales market is perfectly competitive, then Jeff would be able to set the price he charges.

QUESTION 2

Crackerjack Chicken is a local fast food chain in Toowoomba that is looking to expand its market. They have recently opened a store in Brisbane and are earning $8,000/day, with explicit costs of $3,000/day. The opportunity cost of opening the store in this location is considered to be $3,000/day.

Which of the following statements are true:

Crackerjack Chicken'simplicitcostfor the Brisbane store is$3,000/day.
Crackerjack Chicken'sBrisbanestore is earning a normal profit.
Crackerjack Chicken'sBrisbane store is earning an economic profit of$2,000/day.
Crackerjack Chicken'sBrisbane store is earning an accounting profit of$2,000/day.

QUESTION 3

Hamish currently owns an avocado farm which in the past has been highly profitable with revenues of $75,000/year.Recently, a large storm killed his trees and destroyed a large amount of his specialised avocado farming equipment.Costs are estimated to be at least $30,000 to replace the specialised equipment.He is trying to decide whether to replant new avocado trees or to plant orange trees instead.

Select the item from the list provided to make the following statements true.