If a Firm Uses Factor Inputs That Are Personally Owned

question 13

Multiple Choice

If a firm uses factor inputs that are personally owned by the firm's owner,then economists refer to the opportunity cost of these inputs as

• A)direct production costs.
• B)accounting costs.
• C)sunk costs.
• D)implicit costs.
• E)inverted costs.

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Definitions:

Price Per Ton

Price per ton is a measurement of cost used to evaluate bulk materials, indicating how much a buyer must pay for a thousand kilograms of the material.

Producer Surplus

The gap between the minimum amount sellers are prepared to accept for a product or service and the increased amount they actually get because of elevated market prices.

Deadweight Loss

A shortfall in economic efficiency due to a good or service not reaching free market equilibrium.

Total Surplus

The combined value of consumer and producer surplus that signifies the overall advantage to society through the manufacturing and consumption of products or services.