micro test 3 : module 11 Production

in making a decision about how much output it should produce to maximize its profits, which two pieces of information does a firm need?

-the marginal cost -the marginal revenue

marginal product is the :

additional output produced as a result of utilizing one more unit of a variable resource

variable cost per unit of output produced is:

average variable cost

If a business owner can produce more as a whole with an additional worker even if the marginal product associated with that worker is lower than the marginal product associated with the previous worker, then there are:

diminishing marginal returns

Positive ___ profits encourage more firms to enter the market to produce goods and services.

economic

The costs associated with the use of resources are called

economic costs

Which of the following is true of economic costs?

economic costs are defined as the sum of explicit and implicit costs

Monetary payments made by individuals, firms, and governments for use of others' land, labor, capital, and entrepreneurial ability are ______ costs.

explicit

Total revenue minus the total ________ costs of production is accounting profit.

explicit

A person who has been managing a dry cleaning store for $30,000 per year decides to open his own dry cleaning store. The expenses are $35,000 for salaries, $10,000 for supplies, $8,000 for rent, $2,000 for utilities, and $5,000 for interest on a bank loan. The explicit costs include : and the implicit costs include:

explicit: -rent -interest on the bank loan -salaries -utilities Implicit: the owners forsaken costs

Costs that do not change with the amount of output produced are ____ costs.

fixed

The shape of the long-run average total cost curve can differ for different types of firms, depending on:

how much production it takes to reach the minimum long-run average total cost.

The opportunity costs of using owned resources are ____costs.

implicit

To determine the true cost associated with the production of goods or services, ________ costs should be taken into account.

implicit

The true costs of an economic activity such as the production of goods and services must include:

implicit cost

Diseconomies of scale is a condition in which the __________ -run average total cost of production increases as production increases.

long

Decreasing ______ returns are a characteristic of production whereby the marginal product of the next unit of a variable resource utilized is less than that of the previous variable resource.

marginal

Increasing ______ returns are a characteristic of production whereby the marginal product of the next unit of a variable resource utilized is greater than that of the previous variable resource.

marginal

The ____ costs of using owned resources are implicit costs.

opportunity

Explicit costs are also known as _____ costs

seen

A period of time in which at least one input of production is fixed is known as the _______ run.

short

The fixed cost per unit is equal to :

the average fixed cost

Total product is:

the total amount of output produced with a given amount of resources.

Any time you give up the opportunity to use the resource for something else :

there is an opportunity cost

Total cost

total fixed cost + total variable cost

The price of a good times the quantity sold equals

total revenue

costs that change with the amount of output produced are _____ costs.

variable

Suppose a snowboard manufacturer increases it output by 1 snowboard per day. As a result, the total cost of producing snowboards each day rises from $120 to $145. The marginal cost of producing an extra snowboard is :

$25