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Marginal Revenue is the additional revenue from a unit increase in output and sales
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When of the following correctly defines marginal revenue?
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Has twice the slope as the demand curve
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For a downward-sloping demand curve, the associated marginal revenue curve
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Marginal cost is the additional cost of producing an extra unit of output
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Which of the following correctly defines marginal cost?
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The marginal cost is negligible or zero
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A firm will maximize profits and revenues at the same price when:
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The general income level of consumers
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Other factors constant, a change in ___ will cause a shift in a firm's demand curve
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There is an upward movement along the demand curve
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If the price of a good or service increases, what happens to the firm's demand curve?
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Are perfect substitutes
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If a production function is expressed in a linear form, the inputs used in the production process
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at its maximum
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When the marginal product of a variable input is zero, it implies that the firm is at the point where total product is
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Will increase output by the same proportion as the increase in inputs
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When a firm faces constant returns to scale, a proportionate increase in all inputs
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The ratio of the input prices
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The slope of the isocost line shows
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In all of the inputs
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Output elasticity is the percentage change in output that results from a 1% increase
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a. Average total cost is equal to marginal cost
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When average total cost is at its minimum point:
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Is decreasing over all levels of output
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The average fixed cost for a firm:
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Fixed costs are incurred regardless of the firm's level of output
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Which of the following is true of a firm's fixed costs?
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Marginal cost must be greater than short-run average cost
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If the short-run average cost is increasing then:
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Marginal cost must be increasing
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In the short run, if the marginal product of labor is decreasing, then:
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It is the additional output produced by an additional unit of labor, all other factors held constant
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1. Which of the following correctly defines the marginal product of labor?
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a. When one input is increased, with all others inputs unchanged, the marginal product of the input will eventually decline
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What does the law of diminishing returns state?
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