FFA FARM BUSINESS MANAGEMENT PRACTICE TEST #1
| 2026 UPDATE | QUESTIONS AND ANSWERS | WITH
COMPLETE SOLUTION
When economists speak of scarcity, they are referring to the _______. Answer
- Condition in which peoples wants outstrip the limited resources available to
satisfy those wants.
Which of the following is NOT one of the categories of resources? Answer -
government
"Entrepreneurship" is________. Answer - the talent for organizing the use of
land, labor and capital, among other things.
Some years ago, chemists at 3m corporation were trying to create a super-
strong glue. somehow they got their molecules twisted and came up with one
of the weakest glues ever made. Rather than pouring it down the drain, they
tried coating some paper with it. Voila! The post-it note was born. In this case,
3M was acting as.... Answer - an entrepreneur.
economic profit is the difference between total revenue and_____ Answer -
the sum of explicit and implicit costs.
A cost of resources used in production for which no actual monetary payment
is made is a(n) __________ cost. Answer - implicit
, Five months ago Wilson opened up a health club. Which of the following is an
implicit cost related to the health club? Answer - Wilson previously worked as
an accountant, earning $3,000 a month.
If a firm earns normal profit, then it has generated revenues_____ Answer -
equal in o the sum of implicit and explicit costs.
An unrecoverable cost that should be disregarded in any current or future
decision is also called a(n) __________ cost. Answer - sunk
a fixed input is an input whose quantity ____ Answer - cannot be changed as
output changes in the short run
average fixed cost ___ Answer - Is usually greater at lower levels of output
than at higher levels and only exists in the short run.
at 200 units of output, total costs is $36,000 and total variable cost is $20,000.
What does the total fixed cost equal at 200 units? Answer - $16,000
Costs that do not change with output are called ___ costs. Answer - fixed
suppose that one fixed and one variable input are used to produce good X. as
the marginal physical product of the variable input increases, the marginal cost
____ Answer - decreases.
one major reason for the law of demand is that ____ Answer - people
substitute relatively lower-priced goods for relatively higher-priced goods.
if an increase in income is results in an increase in the demand for chicken,then
chicken is _____ Answer - a normal good.
| 2026 UPDATE | QUESTIONS AND ANSWERS | WITH
COMPLETE SOLUTION
When economists speak of scarcity, they are referring to the _______. Answer
- Condition in which peoples wants outstrip the limited resources available to
satisfy those wants.
Which of the following is NOT one of the categories of resources? Answer -
government
"Entrepreneurship" is________. Answer - the talent for organizing the use of
land, labor and capital, among other things.
Some years ago, chemists at 3m corporation were trying to create a super-
strong glue. somehow they got their molecules twisted and came up with one
of the weakest glues ever made. Rather than pouring it down the drain, they
tried coating some paper with it. Voila! The post-it note was born. In this case,
3M was acting as.... Answer - an entrepreneur.
economic profit is the difference between total revenue and_____ Answer -
the sum of explicit and implicit costs.
A cost of resources used in production for which no actual monetary payment
is made is a(n) __________ cost. Answer - implicit
, Five months ago Wilson opened up a health club. Which of the following is an
implicit cost related to the health club? Answer - Wilson previously worked as
an accountant, earning $3,000 a month.
If a firm earns normal profit, then it has generated revenues_____ Answer -
equal in o the sum of implicit and explicit costs.
An unrecoverable cost that should be disregarded in any current or future
decision is also called a(n) __________ cost. Answer - sunk
a fixed input is an input whose quantity ____ Answer - cannot be changed as
output changes in the short run
average fixed cost ___ Answer - Is usually greater at lower levels of output
than at higher levels and only exists in the short run.
at 200 units of output, total costs is $36,000 and total variable cost is $20,000.
What does the total fixed cost equal at 200 units? Answer - $16,000
Costs that do not change with output are called ___ costs. Answer - fixed
suppose that one fixed and one variable input are used to produce good X. as
the marginal physical product of the variable input increases, the marginal cost
____ Answer - decreases.
one major reason for the law of demand is that ____ Answer - people
substitute relatively lower-priced goods for relatively higher-priced goods.
if an increase in income is results in an increase in the demand for chicken,then
chicken is _____ Answer - a normal good.
