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Profit Answers

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1
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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.
2
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What is the difference between profit and revenue?

R
Revenue is the total amount producers receive after selling a good. Profit is the total amount producers earn after subtracting the production costs.
R
Revenue is the total amount producers earn after subtracting the production costs. Profit is the total amount producers receive after selling a good.
R
Revenue is the total amount producers pay to manufacture a good. Profit is the total amount producers earn after subtracting the production costs.
R
Revenue is the total amount producers pay to manufacture a good. Profit is the total amount producers receive after selling a good.
3

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.
4

Clark’s Cleaners is a housekeeping service. The company’s expenses include the

m
money the company earns after paying all of its production costs.
c
cleaning supplies and any equipment the company purchases.
t
total amount of money the company receives from its customers.
a
amount of money the company earns from an individual cleaning.
5

The point of maximum profit is the point at which the marginal cost equals the

A
marginal revenue.
B
market price.
C
total revenue.
D
production cost.
6

The Davis family grows organic vegetables to sell at a local farmer’s market. Which are factors that directly affect their profit? Check all that apply.

A
an increase in the cost of farm equipment
B
a rise in demand for organic produce
C
an increase in customers at the market
D
a change in the market price for non-organic fruit
E
a sale on organic meats at the market
7

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
8

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 profit the company earns after selling 100 boards?

$
$300
$
$350
$
$3,000
$
$3,500
9

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.
10

To generate higher profits, producers must work to

i
increase their total supply.
i
increase their total expenses.
d
decrease their customer base.
d
decrease their production costs.
11

[BLANK]

A
debts
B
profits
C
expenses
D
costs
12

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.
13

Producers must understand the marginal benefit of making an additional unit, which shows the

A
actual gain.
B
eventual gain.
C
possible gain.
D
unlikely gain.
14

What is the best definition of marginal cost?

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
15

Profit equals the total amount of money made minus

A
expenses.
B
prices.
C
revenue.
D
supply.
16

[BLANK]

A
total revenue
B
marginal revenue
C
marginal cost
D
total units produced
17

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 profit the company earns after selling 100 boards?

A
$300
B
$350
C
$3,000
D
$3,500
18

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.
19

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.
20

What is the difference between profit and revenue?

A
Revenue is the total amount producers receive after selling a good. Profit is the total amount producers earn after subtracting the production costs.
B
Revenue is the total amount producers earn after subtracting the production costs. Profit is the total amount producers receive after selling a good.
C
Revenue is the total amount producers pay to manufacture a good. Profit is the total amount producers earn after subtracting the production costs.
D
Revenue is the total amount producers pay to manufacture a good. Profit is the total amount producers receive after selling a good.

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