AGEC 324 FINAL QUESTIONS & ANSWERS
Accounting profit includes both out-of-pocket (explicit) costs and opportunity (implicit)
costs. - Answer -TRUE
Milton Friedman said that "there is no such thing as a free lunch" (TINSTAFL). What
does this mean? - Answer -In a world of scarcity, everything has an opportunity cost
Who wrote the Cilantro Diaries? - Answer -Lorenzo Gomez III
There is no limit on the amount of your earned income subject to Social Security
taxation - Answer -FALSE
There is no limit on the amount of your earned income subject to Medicare taxation -
Answer -TRUE
When conducting a GoalSeek analysis, the cell targeted for setting equal to a
specifiedvalue may not contain an equation. - Answer -FALSE
The U.S. Federal Tax Code is which of the following with respect to marginal tax
brackets astaxpayers' taxable income increases: - Answer -Progressive
This term refers to the amount of loss a customer must pay before his/her insurance
company will compensate him/her for the remaining amount of loss - Answer -
Deductible
This term refers to the amount a customer pays an insurance company to obtain or
maintain an insurance policy and for the insurance company to assume part of the risk
associated with a catastrophic loss. - Answer -Premium
This term refers to the amount an insurance company pays one of its customers
whenhe/she incurs a catastrophic loss covered by his / her insurance policy with that
insurancecompany - Answer -Indemnity
Stage II of production is where the marginal physical product is negative - Answer -
FALSE
Stage I of production is where the marginal physical product lies above the average
physical product curve - Answer -TRUE
How many stages of production are in a classical production function? - Answer -3
An enterprise budget provides an estimate of the potential revenue, expenses and profit
for a single enterprise. - Answer -TRUE
, A production function is the relationship between the quantity of inputs a firm uses and
_________? - Answer -quantity of output it produces
Fixed costs exist only in the short run - Answer -TRUE
Indicate whether the cost is a fixed cost or a variable cost - Answer -Diesel-Variable
Cost
Property Taxes-Fixed Cost
Insurance-Fixed Cost
Chicken Fingers-Variable Cost
Labor Hired on an Hourly Basis-Variable Cost
KNOW PRODUCTION FUNCTION CURVES - Answer -Marginal Cost, Average total
cost, average variable cost, and average fixed cost.
In the short run - Answer -Total variable costs are zero when there is no production
At the output level where MC is just equal to ATC - Answer -ATC is at its minimum
value
Variable costs are those costs that - Answer -increase or decrease in proportion to the
units of an enterprise that are carried out
n AGEC 324, a capital asset is an asset which has a useful life in a business that is
(select the one best correct answer) - Answer -more than one year
A business is said to be a price taker when its actions have absolutely no effect on the
price of the product it is selling. - Answer -TRUE
U.S. Medicare tax rates are which of the following as taxpayers' net income increases: -
Answer -Constant, i.e., the same rate is applied to all income
The minimal rate of return an investor desires to earn from invested capital in Albert's
startup business in AGEC 324 is: - Answer -12%
The interest rate being charged by a third-party financial lender for a capital loan made
to Albert'sstartup business in AGEC 324 is: - Answer -7%
The minimal equity position required for Albert Aggie and his investor is: - Answer -50%
In AGEC 324, which depreciation method is used? - Answer -Straight-Line
The purpose of the CAPAST Base, CAPAST Revised, and CAPAST Expanded Excel s-
s is to assist in identifying all required capital assets and inventory items that need to be
controlled by the business owner/operator when the business is open. - Answer -TRUE
Accounting profit includes both out-of-pocket (explicit) costs and opportunity (implicit)
costs. - Answer -TRUE
Milton Friedman said that "there is no such thing as a free lunch" (TINSTAFL). What
does this mean? - Answer -In a world of scarcity, everything has an opportunity cost
Who wrote the Cilantro Diaries? - Answer -Lorenzo Gomez III
There is no limit on the amount of your earned income subject to Social Security
taxation - Answer -FALSE
There is no limit on the amount of your earned income subject to Medicare taxation -
Answer -TRUE
When conducting a GoalSeek analysis, the cell targeted for setting equal to a
specifiedvalue may not contain an equation. - Answer -FALSE
The U.S. Federal Tax Code is which of the following with respect to marginal tax
brackets astaxpayers' taxable income increases: - Answer -Progressive
This term refers to the amount of loss a customer must pay before his/her insurance
company will compensate him/her for the remaining amount of loss - Answer -
Deductible
This term refers to the amount a customer pays an insurance company to obtain or
maintain an insurance policy and for the insurance company to assume part of the risk
associated with a catastrophic loss. - Answer -Premium
This term refers to the amount an insurance company pays one of its customers
whenhe/she incurs a catastrophic loss covered by his / her insurance policy with that
insurancecompany - Answer -Indemnity
Stage II of production is where the marginal physical product is negative - Answer -
FALSE
Stage I of production is where the marginal physical product lies above the average
physical product curve - Answer -TRUE
How many stages of production are in a classical production function? - Answer -3
An enterprise budget provides an estimate of the potential revenue, expenses and profit
for a single enterprise. - Answer -TRUE
, A production function is the relationship between the quantity of inputs a firm uses and
_________? - Answer -quantity of output it produces
Fixed costs exist only in the short run - Answer -TRUE
Indicate whether the cost is a fixed cost or a variable cost - Answer -Diesel-Variable
Cost
Property Taxes-Fixed Cost
Insurance-Fixed Cost
Chicken Fingers-Variable Cost
Labor Hired on an Hourly Basis-Variable Cost
KNOW PRODUCTION FUNCTION CURVES - Answer -Marginal Cost, Average total
cost, average variable cost, and average fixed cost.
In the short run - Answer -Total variable costs are zero when there is no production
At the output level where MC is just equal to ATC - Answer -ATC is at its minimum
value
Variable costs are those costs that - Answer -increase or decrease in proportion to the
units of an enterprise that are carried out
n AGEC 324, a capital asset is an asset which has a useful life in a business that is
(select the one best correct answer) - Answer -more than one year
A business is said to be a price taker when its actions have absolutely no effect on the
price of the product it is selling. - Answer -TRUE
U.S. Medicare tax rates are which of the following as taxpayers' net income increases: -
Answer -Constant, i.e., the same rate is applied to all income
The minimal rate of return an investor desires to earn from invested capital in Albert's
startup business in AGEC 324 is: - Answer -12%
The interest rate being charged by a third-party financial lender for a capital loan made
to Albert'sstartup business in AGEC 324 is: - Answer -7%
The minimal equity position required for Albert Aggie and his investor is: - Answer -50%
In AGEC 324, which depreciation method is used? - Answer -Straight-Line
The purpose of the CAPAST Base, CAPAST Revised, and CAPAST Expanded Excel s-
s is to assist in identifying all required capital assets and inventory items that need to be
controlled by the business owner/operator when the business is open. - Answer -TRUE
