#1
Which of the following best describes economic costs?
Explicit costs only
Implicit costs only
Both explicit and implicit costs
Accounting costs only
#2
Which of the following is NOT a type of cost in economics?
Fixed cost
Variable cost
Total cost
Social cost
#3
What does the production function represent?
The relationship between the quantity of inputs used and the quantity of output produced
The relationship between total cost and quantity of output
The relationship between average total cost and quantity of output
The relationship between marginal cost and quantity of output
#4
Which of the following is NOT a factor of production?
#5
Which of the following is an example of a fixed input in production?
Raw materials
Labor
Rent for factory space
Electricity
#6
What does the term 'marginal' refer to in economics?
The additional or incremental change resulting from a one-unit increase in an activity
The total change resulting from a one-unit increase in an activity
The average change resulting from a one-unit increase in an activity
The maximum change resulting from a one-unit increase in an activity
#7
In production theory, what does the law of diminishing returns state?
As more of a variable input is added to a fixed input, the marginal product of the variable input declines.
As more of a fixed input is added to a variable input, the total product declines.
As more of a variable input is added to a fixed input, the total product increases.
As more of a fixed input is added to a variable input, the marginal product of the fixed input declines.
#8
What is the relationship between marginal cost and average total cost when marginal cost is below average total cost?
Marginal cost equals average total cost
Marginal cost is less than average total cost
Marginal cost is greater than average total cost
Marginal cost does not affect average total cost
#9
What is the formula for calculating average variable cost?
Average Variable Cost = Total Variable Cost / Quantity of Output
Average Variable Cost = Total Variable Cost - Quantity of Output
Average Variable Cost = Total Variable Cost * Quantity of Output
Average Variable Cost = Total Variable Cost + Quantity of Output
#10
Which of the following statements best describes economies of scale?
When long-run average total cost decreases as output increases
When long-run average total cost increases as output increases
When short-run average variable cost decreases as output increases
When short-run average variable cost increases as output increases
#11
In the short run, which of the following costs can a firm change?
Total fixed costs
Total variable costs
Total fixed costs and total variable costs
None of the costs
#12
What is the main difference between economic costs and accounting costs?
Accounting costs include only explicit costs, while economic costs include both explicit and implicit costs.
Economic costs include only explicit costs, while accounting costs include both explicit and implicit costs.
Accounting costs include both explicit and implicit costs, while economic costs include only explicit costs.
Accounting costs and economic costs are synonymous terms.
#13
Which of the following is an example of an implicit cost?
Rent paid for office space
Wages paid to employees
Interest on a loan
Foregone salary from self-employment
#14
Which of the following is true about the relationship between marginal cost and average variable cost?
When marginal cost is less than average variable cost, average variable cost is decreasing.
When marginal cost is greater than average variable cost, average variable cost is increasing.
When marginal cost equals average variable cost, average variable cost is constant.
All of the above.
#15
In the short run, which of the following costs are relevant for decision-making?
Total fixed costs
Total variable costs
Total fixed costs and total variable costs
Both total fixed costs and total variable costs, as well as opportunity costs