Chapter 5 quiz

Profit

Total revenue minus total cost equals:

Property taxes

Which of the following is most likely a fixed cost?

Fixed cost and variable cost added together and then divided by output

Which of the following is equivalent to average total cost:

Marginal Physical Product

The change in total output that results from one additional unit of input is the:

Variable costs

Costs of production that change with the rate of output are:

Marginal Physical product of a variable input declines as more of it is used

Ceteris paribus, the law of diminishing returns states that beyond some point the:

Are the sum of actual monetary payments made for resources used to produce a good.

Explicit Costs:

$.60

If an additional unit of labor costs $30 and has an MPP of 50 units of output, the marginal cost is

After the second worker marginal product declines

If the first, second, third, and forth worker employed by the firm add 15,21,12 and 8 units of total product respectively, we can conclude that:

Explicit and Implicit costs while accountants recognize only explicit costs

In defining costs, economists recognize

The change in total cost divided by the change in output

Marginal cost is equal to:

Marginal physical product is increasing

Marginal cost will increase with greater output if:

Production fuction

The limits to the production of any good are reflected in the

In the long run all resources are variable where as in the short run at least one resource is fixed

The main difference to an economist between "short-run" and "long-run" is that:

Maximizes total profit

The most desirable rate of output is the one that:

Marginal cost versus price

The short-run supply decision focuses on:

Variable over the long run

When a firm makes an investment decision, it views all inputs as:

Fixed costs plus variable costs

Which of the following is equivalent to total cost?

All factors of production are variable in the long run

Which of the following is the best explanation of why the law of diminishing returns does not apply in the long run?

Some inputs are fixed

Which of the following is true about the short run?