Mirco Final 11-14

The relationship between the factors of production used by a firm and the maximum output possible is called the -average total cost. -profit function. -production function. -average product.

-production function.

Which of the statements is not true? -Marginal cost is the change in a firm's variable cost due to a one‑unit change in output. -Costs that are small and unimportant with little impact on profits are called marginal costs. -Marginal cost and marginal productivity are inversely related. -A marginal cost curve will always intersect the average variable cost curve at the minimum average variable cost.

-Costs that are small and unimportant with little impact on profits are called marginal costs.

The long run is best defined as a time period -during which at least one input cannot be changed. -that is longer than one year. -during which prices of other goods change. -during which all inputs can be varied.

-during which all inputs can be varied.

Marginal cost is defined as -total cost divided by total output. -the change in total costs from producing one more unit of output. -total variable cost divided by total output. -the change in fixed cost from producing one more unit of output.

-the change in total costs from producing one more unit of output.

One thing that distinguishes the short run and the long run is -the existence of at least one fixed input. -the existence of marginal costs. -the number of months considered. -implicit costs.

-the existence of at least one fixed input.

The marginal cost curve often decreases at first and then starts to increase. This is explained by -the law of diminishing returns. -economies of scale. -increasing ATC.

-the law of diminishing returns.