Table 221 The Accounting Profit Is Equal to
A)$925

question 32

Multiple Choice

Table 22.1 $$\begin{array}{l} \text { Assume an apple farmer incurs the following costs and revenues }\\\begin{array} {| l | r| } \hline \text { Fertilizer } & \$ 200 \\\hline \text { Seeds } & \$ 75 \\\hline \text { Water } & \$ 250 \\\hline \text { Wages } & \$ 750 \\\hline \text { Property taxes } & \$ 600 \\\hline \text { Interest payments on borrowed funds } & \$ 1,200 \\\hline \text { Bales of apples } & \$ 4,000 \\\hline\end{array}\end{array}$$ The accounting profit is equal to

• A)$925.
• B)$1,525.
• C)$2,125.
• D)$4,000.

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Definitions:

Marginal Cost Curve

A graphical representation showing the change in total cost produced by making one additional unit of a good or service.

Average Variable Cost

The total variable cost of producing goods divided by the quantity of goods produced.

Law of Diminishing Marginal Returns

A rule of economics that asserts when a single production element is expanded and the rest stay unchanged, there will ultimately be a decline in total output after reaching a specific threshold.