AnswersCHS EconomicsProfit

Comparative and Absolute Advantage Answers

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South Avenue Publishing produces self-help books. The company’s profit is the

A
money the company earns after paying all of its production costs.
B
paper, binding, and other supplies the company purchases.
C
total amount the company receives from the sale of its books.
D
amount of money the company earns from selling a single book.
2
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total revenuemarginal revenuemarginal costtotal units produced

A
total revenue
B
marginal revenue
C
marginal cost
D
total units produced
3

The chart shows the marginal revenue of producing apple pies.According to the chart, the marginal revenue

Question illustration
A
decreases by ten dollars as production increases.
B
increases by ten dollars as production increases.
C
falls to zero dollars as production increases.
D
remains the same as production increases.
4

What is the difference between marginal cost and marginal revenue?

A
Marginal cost is the money earned from selling one more unit of a good. Marginal revenue is the money paid for producing one more unit of a good.
B
Marginal cost is the money paid for producing one more unit of a good. Marginal revenue is the money earned from selling one more unit of a good.
C
Marginal cost is the money a producer might make from one more unit. Marginal revenue is the money a producer actually makes from one more unit.
D
Marginal cost is the money a producer actually makes from one more unit. Marginal revenue is the money a producer might make from one more unit.
7

In order to calculate marginal cost, producers must compare the difference in the cost of producing one unit to the cost of

A
purchasing a unit.
B
distributing that unit.
C
producing the next unit.
D
producing a different unit.
8

To generate higher profits, producers must work to

A
increase their total supply.
B
increase their total expenses.
C
decrease their customer base.
D
decrease their production costs.
9

What is the best definition of marginal revenue?

A
the possible income from producing an additional item
B
the price of producing one additional unit of a good
C
the additional income gained from selling an additional good
D
the financial gain from business activity minus expenses
10

Brenda’s Boards manufactures skateboards. Each skateboard sells for $45 and includes the following expenses: $3 for the wheels and mounts, $1 for the plastic board, $1 for the paint, and $10 for the labor. What is the total revenue the company makes after selling 10 boards?

A
$300
B
$350
C
$400
D
$450

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