AGEC 324 Final Exam questions and
answers graded A+
accounting profit includes both out-of-pocket (explicit) costs and opportunity (implicit) costs -
correct answer ✔✔false
Milton Friedman said that "there is no such thing as a free lunch" What does this mean? -
correct answer ✔✔in a world of scarcity, everything has an opportunity cost
there is no limit on the amount of your earned income subject to social security taxation -
correct answer ✔✔false
there is no limit on the amount of your earned income subject to MediCare taxation - correct
answer ✔✔true
When conducting a GoalSeek analysis, the cell targeted for setting equal to a specified value
may not contain an equation - correct answer ✔✔false
U.S. Federal tax code is - correct answer ✔✔progressive
amount of loss a customer must pay before insurance company will compensate for the
remaining amount of loss - correct answer ✔✔deductible
Amount a customer must pay an insurance company to obtain or maintain an insurance policy -
correct answer ✔✔premium
, Amount an insurance company pays one of its customers when they insure a catastrophic loss
covered by insurance policy - correct answer ✔✔indemnity
stage II of production is where the Marginal physical product is negative - correct answer
✔✔false
Stage I of production is where the marginal physical product lies above the average physical
product curve - correct answer ✔✔true
how many stages of production are in a classical production function? - correct answer ✔✔3
An enterprise budget provides an estimate of the potential revenue, expenses, and profit for a
single enterprise - correct answer ✔✔true
A production function is the relationship between the quantity of inputs a firm uses and -
correct answer ✔✔the quantity of output it produces
in the short run, - correct answer ✔✔TVC are zero when there is no production
fixed costs only exist in the short run - correct answer ✔✔true
At the output level where MC = ATC - correct answer ✔✔ATC is at its minimum value
Variable Costs - correct answer ✔✔costs that increase or decrease in proportion to the units of
an enterprise that are carried out
capital asset is an asset which ahs a useful life of - correct answer ✔✔more than a year
answers graded A+
accounting profit includes both out-of-pocket (explicit) costs and opportunity (implicit) costs -
correct answer ✔✔false
Milton Friedman said that "there is no such thing as a free lunch" What does this mean? -
correct answer ✔✔in a world of scarcity, everything has an opportunity cost
there is no limit on the amount of your earned income subject to social security taxation -
correct answer ✔✔false
there is no limit on the amount of your earned income subject to MediCare taxation - correct
answer ✔✔true
When conducting a GoalSeek analysis, the cell targeted for setting equal to a specified value
may not contain an equation - correct answer ✔✔false
U.S. Federal tax code is - correct answer ✔✔progressive
amount of loss a customer must pay before insurance company will compensate for the
remaining amount of loss - correct answer ✔✔deductible
Amount a customer must pay an insurance company to obtain or maintain an insurance policy -
correct answer ✔✔premium
, Amount an insurance company pays one of its customers when they insure a catastrophic loss
covered by insurance policy - correct answer ✔✔indemnity
stage II of production is where the Marginal physical product is negative - correct answer
✔✔false
Stage I of production is where the marginal physical product lies above the average physical
product curve - correct answer ✔✔true
how many stages of production are in a classical production function? - correct answer ✔✔3
An enterprise budget provides an estimate of the potential revenue, expenses, and profit for a
single enterprise - correct answer ✔✔true
A production function is the relationship between the quantity of inputs a firm uses and -
correct answer ✔✔the quantity of output it produces
in the short run, - correct answer ✔✔TVC are zero when there is no production
fixed costs only exist in the short run - correct answer ✔✔true
At the output level where MC = ATC - correct answer ✔✔ATC is at its minimum value
Variable Costs - correct answer ✔✔costs that increase or decrease in proportion to the units of
an enterprise that are carried out
capital asset is an asset which ahs a useful life of - correct answer ✔✔more than a year
