Economics review number 2

fixed costs; do not change,

A firm's ___________ consist of expenditures that must be made before production starts that typically, over the short run, _______________ regardless of the level of production.

Refer to the diagram

All of the above

Refer to the diagram above. What is the significance of the point marked L1 at the bottom upward-sloping portion of the individual labor supply (2) curve?

As wages increase over this range, the quantity of hours worked also increases.

economies of scale

The term __________________ describes a situation where the quantity of output rises, but the average cost of production falls.

individuals choose based on their preferences.

The key assumption that accompanies the use of numbers for measuring utility is that

expanding all inputs does not change the average cost of production.

The term "constant returns to scale" describes a situation where

marginal utility

What term is used to describe the additional utility provided by one additional unit of consumption

maximizing utility

When Marietta chooses to only purchase a combination of goods that lie within her budget line, she

The marginal utility per dollar is the same for both goods

Which of the following is considered to be a tell-tale signal that the point with the highest total utility has been found?

Diminishing marginal returns

____________________________ occur when the marginal gain in output diminishes as each additional unit of input is added.