Question : 11) Which of the following an implicit cost of production? A) : 1267130

11) Which of the following is an implicit cost of production?

A) the loss in the value of capital equipment due to wear and tear

B) the salary you pay yourself for running your business

C) the utility bill paid to water, electricity, and natural gas companies

D) the interest you pay your mother for the money she loaned you to start your business

12) The explicit cost of production is also called

A) variable cost.

B) accounting cost.

C) direct cost.

D) overhead cost.

13) Which of the following are implicit costs for a typical firm?

A) opportunity costs of capital owned and used by the firm

B) the cost of labor hired by the firm

C) utilities cost

D) a business licensing fee

14) Jayanthi moves her yoga studio from her home to a space she rents in Oakland, California. Holding everything else constant, as a result of this move,

A) her explicit cost falls and her implicit cost rises.

B) her implicit cost falls and her explicit cost rises.

C) her economic cost rises.

D) her opportunity cost rises.

15) Which of the following would be categorized as an opportunity cost?

a.not being able to spend your $10,000 savings if you sink the money in your business

b.the cost of purchasing supplies for your house-cleaning business

c.the cost of purchasing auto insurance for your dry-cleaning delivery business

A) a only

B) a and c only

C) b and c only

D) all of the above

16) Golda Rush quit her job as a manager for Home Depot to start her own hair dressing salon, Goldilocks.  She gave up a salary of $40,000 per year, invested her savings of $30,000 (which was earning 5 percent interest) and borrowed $10,000 from a close friend, agreeing to pay 5 percent interest per year.  In her first year, Golda spent $18,000 to rent a salon, hired a part-time assistant for $12,000 and incurred another $15,000 on equipment and hairdressing material. Based on this information, what is the amount of her explicit costs?

A) $45,000

B) $45,500

C) $47,000

D) $87,000

17) Golda Rush quit her job as a manager for Home Depot to start her own hair dressing salon, Goldilocks.  She gave up a salary of $40,000 per year, invested her savings of $30,000 (which was earning 5 percent interest) and borrowed $10,000 from a close friend, agreeing to pay 5 percent interest per year.  In her first year, Golda spent $18,000 to rent a salon, hired a part-time assistant for $12,000 and incurred another $15,000 on equipment and hairdressing material. Based on this information, what is the amount of her implicit costs?

A) $80,000

B) $70,000

C) $42,000

D) $41,500

18) The production function shows

A) the total cost of producing a given quantity of output.

B) the maximum output that can be produced from each possible quantity of inputs.

C) the technology used to produce output.

D) the incremental output gained by improving the production process.

19) The average total cost of production

A) is the extra cost required to produce one more unit.

B) equals the explicit cost of production.

C) equals total cost of production divided by the level of output.

D) equals total cost of production multiplied times the level of output.

20) Vipsana’s Gyros House sells gyros. The cost of ingredients (pita, meat, spices, etc.) to make a gyro is $2.00. Vipsana pays her employees $60 per day.  She also incurs a fixed cost of $120 per day. Calculate Vipsana’s variable cost per day when she produces 50 gyros using two workers?

A) $100

B) $124.40

C) $220

D) $240