# Production and Costs Clicker Questions

Document created by Elizabeth Uva on Mar 31, 2015Last modified by Elizabeth Uva 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: