1. Problems and Applications Q1 This chapter discusses many types of costs: opportunity cost, total cost, fixed cost, variable cost, average total cost, and marginal cost. Fill in the type of cost that best completes each sentence. What you give up for taking some action is called the . is falling when marginal cost is below it and rising when marginal cost is above it. A cost that does not depend on the quantity produced is . In the ice-cream industry in the short run, includes the cost of cream and sugar but not the cost of the factory. Profits equal total revenue minus . The cost of producing an extra unit of output is the .

Selected data for stick’s design are given as of december 31, year 1 and year 2 (rounded to the nearest hundredth). year 2 year 1 net credit sales $25,000 $30,000 cost of goods sold 16,000 18,000 net income 2,000 2,800 cash 5,000 900 accounts receivable 3,000 2,000 inventory 2,000 3,600 current liabilities 6,000 5,000 compute the following: 1. current ratio for year 2 2. acid-test ratio for year 2 3. accounts receivable turnover for year 2 4. average collection period for year 2 5. inventory turnover for year 2

Companies hd and ld are both profitable, and they have the same total assets (ta), total invested capital, sales (s), return on assets (roa), and profit margin (pm). both firms finance using only debt and common equity. however, company hd has the higher total debt to total capital ratio. which of the following statements is correct? a) company hd has a higher assets turnover than company ld. b) company hd has a higher return on equity than company ld. c) none of the other statements are correct because the information provided on the question is not enough. d) company hd has lower total assets turnover than company ld. e) company hd has a lower operating income (ebit) than company ld

(a) what do you think will happen if the price of non-gm crops continues to rise? why? (b) what will happen if the price of non-gm food drops? why?