#1
Which of the following is a measure of how much output is generated per unit of input?
Productivity
ExplanationProductivity measures output per unit of input.
#2
Which of the following is a measure of a company's efficiency in managing its assets to produce revenue?
Asset turnover ratio
ExplanationAsset turnover ratio measures asset efficiency in revenue generation.
#3
Which of the following is NOT a component of the total cost of production?
Sunk costs
ExplanationSunk costs are not part of total production costs.
#4
Which of the following represents an external cost that is not reflected in the market price of a good or service?
Social cost
ExplanationSocial cost is an external cost not included in market price.
#5
Which of the following is NOT a component of total revenue?
Variable costs
ExplanationVariable costs are not part of total revenue.
#6
What is the formula for calculating gross profit?
Total revenue - Cost of goods sold
ExplanationGross profit is total revenue minus the cost of goods sold.
#7
In cost-benefit analysis, what does the term 'discount rate' refer to?
The interest rate used to calculate the present value of future costs and benefits
ExplanationDiscount rate calculates the present value of future costs and benefits.
#8
Which of the following best describes 'opportunity cost'?
The cost of an alternative that must be forgone in order to pursue a certain action
ExplanationOpportunity cost is the forgone alternative cost.
#9
What does the term 'EBITDA' stand for in financial analysis?
Earnings Before Interest, Taxes, Depreciation, and Amortization
ExplanationEBITDA stands for Earnings Before Interest, Taxes, Depreciation, and Amortization.
#10
Which of the following is a measure of the average cost of producing one unit of output?
Average total cost
ExplanationAverage total cost measures cost per unit of output.
#11
What is the difference between fixed costs and variable costs?
Fixed costs remain constant regardless of the level of production, while variable costs change.
ExplanationFixed costs are constant; variable costs change with production.
#12
Which of the following is a method used to evaluate the profitability of an investment by comparing the present value of its benefits with the present value of its costs?
Net present value
ExplanationNet present value compares present benefits and costs for investment profitability.
#13
In cost analysis, what does the term 'marginal cost' refer to?
The additional cost of producing one more unit of a good or service
ExplanationMarginal cost is the extra cost for producing an additional unit.
#14
Which of the following is a measure of the rate of return on an investment relative to its cost?
Return on investment
ExplanationReturn on investment measures the return relative to investment cost.
#15
Which of the following represents the total cost of producing one more unit of a good or service?
Marginal cost
ExplanationMarginal cost is the total cost of producing an additional unit.