1. Two friends, Lejla and Tarik, own and run a bar. Lejla tends bar on Monday, Wednesday, and Friday and receives a wage in addition to tips. Tarik tends bar on Tuesday, Thursday, and Saturday and receives only tips. Which of the following represents an implicit cost of operating the bar?
a. Lejla's wage.
b. Tarik's time.
c. Lejla's tips.
d. Tarik's tips.
e. Both Lejla's and Tarik's tips.
2. Which of the following is most likely to be true of economic and accounting profits?
a. Economic profits are less than accounting profits.
b. Accounting profits are less than economic profits.
c. Economic profits plus accounting profits equal zero.
d. Accounting profits minus economic profits equal zero.
If a farm is able to produce 9,000 pints of strawberries per season on 10 acres. It adds one more acre and is able to produce 12,000 pints per season. The marginal product of land for this farm is: MP = (12,000 - 9,000)/(11 - 10) = 3,000 pints per acre per year, so the right answer is c) 3,000 pints per acre per year. Marginal product measures the change in: d. the firm's output brought about by employing one additional unit of input.