A monetary opportunity costs of using
market-supplied resources
Explicit Cost
The ethical theory that focuses on judging
the moral worth of the results of the
actions.
Consequentialism
Anything of value forgone or sacrificed to
attain an objective.
Cost
The idea that if one person makes money,
someone else must be losing out.
Zero-Sum Fallacy
Refers to the benefits or advantages given
up in exchange of a chose alternatives
Opportunity Cost
A model of behavior that which assumes
that people act rationally, optimally, and
self-interestedly, thst is, they respond to
incentives
Rational-actor Paradigm
The ethical system in which morality is
determined by duty or laws
Deontologism
Costs not affected by the changes in
volume of production or sales within a
relevant range.
Fixed Cost
It occurs when the decision maker
consider irrelevant costs.
Fixed-Cost Fallacy
The government regulations that are
opposite of taxes
Subsidies
What is a possible consequences of a
performance compensation reward
scheme
It creates productive incentives. It
creates harmful incentives.
A price floor
Outflows trade at prices below the
floor. Will create a surplus
All the following are examples of variable
costs, except
Indirect Labor Cost
Which of the following costs is not
variable cost
Rental of the Building
The following are classified as product
costs, expect
Advertising cost
Which of the following government
regulations may impede asset movement
that can destroy potential wealth, except
Enforcing property rights
The rational actor paradigm assumes the
people to
Act rationally, self-interestedly,
optimally.
The circular-flow diagram illustrates that,
in markets for factors of production
Households are sellers, and firms are
buyers.
Why might performance compensation
caps be bad?
Compensation caps can discourage
employees from being productive after
the cap.
The problem-solving principles analyzes
firm problems,
From the organization’s point of view
What might happen if a car dealership is
awarded a bonus by the manufacturer for
selling a certain number of its cars
monthly, but the dealership is just short of
that quota near the end of the month?
It may sell the remaining cars at huge
discounts to hit the quota
What might a supermarket adverise low
prices on certain high profile items and
sell them at a loss?
The store will sell other groceries to the
same customers, often at a markup
The basic consuming units is preferred to
as
Household
It consists of machines, tools, equipment
used in production
Capital
The brain behind the business
Entrepeuner
Which of the following pairs point out
two important factors in the definition of
economics
Limited resources & Unlimited wants
Which of the following items is
considered economic goods?
1o big melons in the fruitstand
Wealth creating transaction are more
likely to occur
With private property rights. With
strong contract enforcement. With
black markets
Taxes
Impede the movement of assets to
higher valued uses. Decrease the
number of wealth-creating
transacrions. Reduce incentives to
work.
They are desires and needs of consumers
that have to be satisfied
Wants
It includes water, forest, minerals, and
animals
Natural Resources
Man’s mental and physical efforts
extended in production
Labor
The price capital is called
Interest
It deals with the national income analysis
Macroeconomics
Which of the following items is called
economic agent?
Organiztaion. Individual. Household
Which of the following is a positive,
rather than a normative statement?
Bill X is a good price of legislation
If a firm is earning negative economic
profits, it implies
That the firm’s accounting profit are
less than the total implicit costs
Opprtunity cost arise due to
Resource scarcity
Voluntary transactions
Always produce gains for both parties
The hidden cost fallacy occurs when
A firm ignores relevant costs
Voluntary Transactions
Always produce gains for both parties
A business owner makes 800 items a day.
Each day she contributes eight hours to
produce those items. If hired elsewhere,
she could have earned $300 an hour for
24 days. The item sells for $28 each.
Production stop during weekends. Thus
only 24 work days in a month. If the
monthly explicit costs total $430,000, the
firm’s, accounting evenue from sales for
the month equals:
$537,600
Based on the problem above, how much is
the total economic costs
$487,600
Based on the information above there is
an
Economic gain of 50,000
Mr. D’s Barbeque of Pickwick, TN,
produces 30,000 dry-rubbed rib sales per
year. Annually Mr.D’s fixed cots are
$300,000. the average variable cost per
slab is a constant $5. the average total cost
per slab then is
$15
If the Revenue from sales is P1,500,000
and thr Gross profits is 60% of the
revenue from sales. Then how much is the
amount of Cost of sales?
P600,000
Xavier opens up a lemonade stand for two
hours. He spends $10 for ingredients and
sells $60 worth of lemonadde. In the same
two hours, he could have washed dishes
for his neighbor for $40. XSavier has an
accounting profit of $50 and an economic
profit of $10
A manufacturing firm produces 1000
units of flower vase with a selling price of
P200 per unit. How much is the total
variable cost per unit if the total fixed cost
is 80,000 and the total average cost per
unit is P125 per unit.
P45
If the economic gain is P500,00 which is
40% of the accounting profit then how
much is the total amount of implicit cost?
P750,000
Integration of economic theory with
business practice for the purpose of
facilitating decison-making and forward
planning.
Managerial Economics
The households that demand the goods
and services
Consumers
The study of the economic behavior of
entire economies
Macro Economics
The primary goal of any organization
which is to maximize the benefits
provided by the organization’s operations
in relation to its costs
Profit Maximization
Their interaction determines how an
economy’s resources are allocated
Economic decison-makers
An individual who decides to combine
resources and produce
Entrepeuner
The market where the goods and services
are made available
Product Market
The physical and mental effort used to
produce goods and services
Labor
An activity, or intangible product, used to
satisfy human wants
Service
The study of how people use their scarce
resources to satisfy their unlimited wants
Economics
A CPA quit his job and gave up a salary
of P800,000 per year in order to start his
own business. He spent P500,00 to buy
machines & kitchen tools taken from
personal savings to put up business
Burger & Fries. Burger &Fries Income
Statement for the year ended December
31, 2018 is shown below:
Revenue from sales 2,800,000
Less:Cost of sales 1,200,000
Gross profit 1,600,000
Less: Operating expense 700,000
Income from operation 900,000
Less: income tax 200,000
Net income after tax 700,000
The owner of burger & fries could have
earned 6% return by his personal money
in mutual funds or UITF with risks
similiar to the risk level at Burger & Fries
Required:
A) Compute the total explicit cost
B) Compute total implicit costs
C) Complete the format shown below by
filling out the blanks with correct figures