Econ MC u3

The payment to an entrepreneur that is just sufficient to keep him engaged in an enterprise is

economic profit
an explicit cost
accounting profit
an accounting cost
normal profit

In the short run, the firm's output is limited by

quotas set by government
the amount of machinery or capital
a significant increase in demand for the product
the number of workers at the plant
the increase in fixed costs

Long-run average total cost falls over the range when a firm experiences

economic profit
normal profit
economies of scale
constant returns to scale
negative returns

Economies of scale are achieved when a firm doubles its inputs, and as a result

output falls to zero
output decreases
output increases, but less than doubles
output exactly doubles
output more than doubles

The long-run average total cost curve consists of the

the lowest unit cost for each level of output when all factors are variable
maximum points of the short-run ATC curves for firms of various sizes
average variable cost curves for firms of various sizes
the lowest marginal cost per unit of output produced
marginal product curves for firms of various sizes

Economies of scale occur as a result of

I. labor specialization
II. management specialization
III. worker alienation
IV. efficient use of capital

Diseconomies of scale occur primarily because as the firm grows in size

tax rates increase
management is further removed from the production line
land becomes more expensive for the owners to purchase
workers demand higher wages
consumers become less willing to purchase the product

At a particular output, a perfectly competitive firm's price is $10, marginal cost is $11, average total cost is $12, and average variable cost is $8. The firm should

increase output to maximize profit
continue production at its current level of output to maximize output
decrease output to minimize loss, but keep producing in the short run
raise the product price to $11 to maximize profit
shut down

If a firm incurs losses, it should continue to produce as long as the price covers the

average variable cost
average fixed cost
average total cost
marginal cost
marginal revenue

If a firm is producing 10 products which it can sell for a price of $5 per unit, and the marginal cost of producing the 11th product is $3, which of the following statements is true?

The total cost of producing 11 units is $5 greater than producing 10 units.
The total revenue of selling 11 units equals the total revenue of selling 10 units.
The total profit from selling 11 units is $2 more than the total profit from selling10 units.
The marginal revenue from selling the 11th unit is $3.
The marginal cost of producing the 11th unit is greater than the marginal revenue from producing it.

normal profit means

able to cover only its accounting costs
unable to fully cover the explicit and implicit costs it faces
just able to cover all of its explicit and implicit costs

The portion of the firm's short-run marginal cost curve that is above the average variable cost curve is the firm's

short-run supply curve
short-run demand curve
long-run supply curve
long-run demand curve
shutdown point