# Econ 160 Final – Flashcards

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Explicit costs are payments the firm makes for
inputs such as wages and salaries to its employees, whereas implicit costs are non-expenditure costs that occur through the use of self owned resources such as foregone income.
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The explicit costs of going to college include
tuition costs and the cost of books, whereas the implicit costs include foregone income.
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Accounting profit equals sales revenue minus explicit costs
True
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A normal profit is considered a cost because
this is the amount required to ensure continued supply of the product.
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Wendy's builds a new restaurant.
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Harley-Davidson Corporation hires 200 more production workers.
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A farmer increases the amount of fertilizer used on his corn crop.
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An Alcoa aluminum plant adds a third shift of workers.
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Complete the following table by calculating marginal product and average product from the data given. (Equations)
MC=∆TVC/∆Q TC=TFC+TVC ATC=TC/Q therefore TC=ATC(Q) AFC=TFC/Q therefore TFC=AFC(Q) AVC=TVC/Q therefore TVC=AVC(Q) ATC=AFC+AVC
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variable cost
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Fuel
variable cost
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Interest on company-issued bonds
fixed cost
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Shipping charges
variable cost
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Payments for raw materials
variable cost
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Real estate taxes
fixed cost
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Executive salaries
fixed cost
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fixed cost
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Wage payments
variable cost
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Depreciation and obsolescence charges
fixed cost
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Sales taxes
variable cost
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Rental payments on leased office machinery
fixed cost
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Which of the following statements is true regarding the costs associated with owning and operating an automobile?
Fixed costs include insurance and variable costs include gasoline.
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You are considering whether to drive your car or fly 1,000 miles to Florida for spring break. In making your decision you should consider