Production and Costs Clicker Questions

Document created by Elizabeth Uva Employee on Mar 31, 2015Last modified by Elizabeth Uva Employee on Apr 1, 2015
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Noah has a thriving boat-building business. He builds one boat each month. To build each boat, Noah must buy 100 planks of wood and 10 pounds of nails, for which he pays $500. He uses machinery that costs $1,000 each month to maintain, in a factory that he rents for $7,000/month. A competitor has been trying for years to get Noah to work for him at a salary of $5000 per month but Noah doesnít want to work for someone else and keeps turning him down. What are Noah's monthly variable costs?

 

A. $500

B. $1,500

C. $13,000

D. $13,500

 


 

Noah has a thriving boat-building business. He builds one boat each month. To build each boat, Noah must buy 100 planks of wood and 10 pounds of nails, for which he pays $500. He uses machinery that costs $1,000 each month to maintain, in a factory that he rents for $7,000/month. A competitor has been trying for years to get Noah to work for him at a salary of $5000 per month but Noah doesnít want to work for someone else and keeps turning him down. What are Noahís total monthly costs?

 

A. $5,000

B. $8,500

C. $13,500

D. $15,000

 


 

Noah has a thriving boat-building business. He builds one boat each month. To build each boat, Noah has input costs of $8,500. He also has the option to go work for a competitor for $5,000. If Noah sells each boat for $10,000, what is his accounting and economic profit?

 

A. Accounting profit = $1500

Economic profit = -$3,500

B. Accounting profit = -$3500

Economic profit = $1500

C. Accounting profit = $1500

Economic profit = $1500

D. Accounting profit = $1500

Economic profit = $3500

 


 

The long run is usually the longest, in terms of actual months and years, for:

 

A. small, family-run businesses.

B. firms that use labor-intensive production methods.

C. large corporations that operate massive factories.

D. industries capable of making quick adjustments to changes in market demand.

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