Economics Test 3

True

Accountants keep track of the money that flows into and out of firms.

True

A 2nd or 3rd worker may have a higher marginal product than the 1st worker in certain circumstances.

True

Accountants often ignore implicit costs

True

As a firm moves along it long-run average cost curve, it is adjusting the size of its factory to the quantity and production.

True

Assume Jack received all A's in his classes last semester. If Jack gets all C's in his classes this semester, his GPA may or may not fall.

True

Average total cost and Marginal cost are merely ways to express information that is already contained in a firm's total cost.

True

Because of the greater flexibility that firms have in the long run, all short-run cost curves lie on or above the long-run curve.

False

Economists normally assume that people start their own businesses to help society maximize its income.

False

Fixed costs are those that remain fixed no matter how long the time horizon is.

False

If the marginal cost curve is rising, so is the average total cost curve.

True

Implicit costs are costs that do not require an outlay of money by the firm.

True

Marginal cost reveals how much total cost will change as the firm alters level of production.

False

The average cost curve is unaffected by diminishing marginal product

True

The average total cost curve reflects the shape of both the average fixed cost and the average cost curves.

True

The marginal cost curve intersects the average total cost curve at the minimum point of the average total cost curve.

True

The shape of the marginal cost curve tells a producer something about the marginal product of her workers.

True

In the long run, there are no fixed inputs.

True

When average total costs rises if a producer either increases or decreases production, then the firm is said to be operating at efficient scale.

False

When economists speak of a firm's cost, they are usually excluding the opportunity costs.