question
The long run is a planning period:
answer
during which the firm can vary all inputs including its plant size
question
If average fixed costs equal $60 and average total costs equal $120 when output is 100, the total variable cost must be:
answer
$6,000
question
An economist left his $100,000-a-year teaching position to work full-time in his own consulting business. In the first year, he had total revenue of $200,000 and business expenses of $150,000. He made a(n):
answer
economic loss
question
Constant returns to scale cause the long-run average cost curve to be:
answer
horizontal
question
In the long run, firms in many industries often experience a falling average total cost curve as a result of:
answer
economies of scale
question
Implicit costs are:
answer
the opportunity costs of using resources owned by the entrepreneur in his/her own business.
question
Which of the following explains most accurately why the firm's short-run marginal cost curve will eventually rise?
answer
When diminishing marginal returns set in, it will take ever-larger quantities of the variable resources to produce an additional unit of output.
question
When total revenue minus total cost is equal to zero, the firm is:
answer
earning a normal profit.
question
Variable inputs are defined as any resource that:
answer
can be changed as output changes
question
Which of the following is considered to be a fixed cost of operating an automobile?
answer
registration fees
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