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ECON 2100 Exam 3 Questions and Correct
Answers
Total revenue (TR) Ans: Amount a firm receives for the sale of its
outputs
Total cost (TC) Ans: Amount a firm pays to buy its outputs
Profit Ans: Total revenue - total cost
Explicit costs Ans: Opportunity costs that require the firm to pay
Implicit costs Ans: Opportunity costs that don't require a cash
outlay. Ex: lost interest from money used to start business that
could have been in the bank
Total cost of someone's business is the sum of _______ and _______
Ans: Explicit costs; implicit costs
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Economic profit Ans: Measured by economists. Total revenue -
(explicit costs + implicit costs)
Accounting profit Ans: Measured by accountants. Total revenue -
explicit costs.
Production function Ans: The graph that shows the relationship
between the quantity of inputs (workers, machines, etc.) and
quantity of outputs (products)
Marginal product Ans: The increase in the quantity of output
obtained from one additional unit of that input
Diminishing marginal product Ans: When marginal product
decreases the more the input increases
- Ex: when you add more workers in a bakery it gets crowded so
the more you add, the less the amount of cookies is gonna
increase
© 2025 All rights reserved
ECON 2100 Exam 3 Questions and Correct
Answers
Total revenue (TR) Ans: Amount a firm receives for the sale of its
outputs
Total cost (TC) Ans: Amount a firm pays to buy its outputs
Profit Ans: Total revenue - total cost
Explicit costs Ans: Opportunity costs that require the firm to pay
Implicit costs Ans: Opportunity costs that don't require a cash
outlay. Ex: lost interest from money used to start business that
could have been in the bank
Total cost of someone's business is the sum of _______ and _______
Ans: Explicit costs; implicit costs
© 2025 All rights reserved
, 2 | Page
Economic profit Ans: Measured by economists. Total revenue -
(explicit costs + implicit costs)
Accounting profit Ans: Measured by accountants. Total revenue -
explicit costs.
Production function Ans: The graph that shows the relationship
between the quantity of inputs (workers, machines, etc.) and
quantity of outputs (products)
Marginal product Ans: The increase in the quantity of output
obtained from one additional unit of that input
Diminishing marginal product Ans: When marginal product
decreases the more the input increases
- Ex: when you add more workers in a bakery it gets crowded so
the more you add, the less the amount of cookies is gonna
increase
© 2025 All rights reserved
