In order to achieve a competitive advantage, a firm should be able to

A. increase its payable turnover.

B. keep its producer surplus low.

C. increase the difference between the value created and the cost to produce it.

D. increase the difference between consumer surplus and its profits.

c
The cost of capital to create a product is a fixed cost because it is

A. directly proportional to the output level.

B. uniform throughout all firms and industries.

C. not a part of the profit calculations.

D. unaffected by consumer demand.

d
Genevieve is a recent fashion graduate. She started her own apparel store with an
investment of $300,000. In the first year she made a profit of $60,000. If she had taken
up a job as a fashion editor for a magazine, she would have earned $50,000 as salary
per year. Also, she could have invested her capital, $300,000, in treasury bonds and
earned an interest of $12,000. Thus, the amount $62,000 ($50,000 + $12,000) would be
Genevieve's

A. social cost.

B. break-even price.

C. reservation price.

D. opportunity cost.
d
Andrew invested $200,000 in the shares of a company. At the end of a year, he had
earned $7,000 as dividends on his shares along with a $1,000 appreciation in the
overall value of his shares. However, if Andrew had invested the same amount on an
asset, like gold, the appreciation in its value would have earned him $10,000 at the end
of the year. In this scenario, which of the following is Andrew's opportunity cost?

A. $7,000

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 B. $10,000

C. $2,000

D. $200,000
b

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