#1
Which of the following is a fixed cost in economics?
Raw materials
Labor wages
Rent for factory space
Electricity bill
#2
What is the difference between explicit costs and implicit costs in economics?
Explicit costs are opportunity costs, while implicit costs are out-of-pocket expenses
Explicit costs are out-of-pocket expenses, while implicit costs are opportunity costs
Both explicit and implicit costs refer to the same concept
Neither explicit nor implicit costs are considered in economics
#3
What is the concept of a 'short run' in economics, particularly in the context of production and costs?
A time period where all inputs are fixed
A time period where at least one input is variable
A time period where there are no production costs
A time period where all inputs are variable
#4
What is the concept of 'diseconomies of scale' in economics?
Decrease in average total cost as production increases
Increase in average total cost as production increases
Steady average total cost regardless of production scale
No relationship between average total cost and production scale
#5
What is the primary purpose of the production function in economics?
To calculate total cost
To determine the optimal level of production
To analyze the relationship between inputs and outputs
To establish pricing strategies
#6
What is the formula for calculating average variable cost?
Total Variable Cost / Quantity
Total Variable Cost - Quantity
Total Variable Cost * Quantity
Quantity / Total Variable Cost
#7
In economics, what does the term 'economies of scale' refer to?
Decrease in average total cost as production increases
Increase in average total cost as production increases
Steady average total cost regardless of production scale
No relationship between average total cost and production scale
#8
In the short run, a firm's average total cost curve will be U-shaped due to the influence of which cost?
Variable cost
Fixed cost
Marginal cost
Average variable cost
#9
What is the relationship between total cost and total variable cost in the long run?
Total cost is always greater than total variable cost
Total cost is always equal to total variable cost
Total cost is always less than total variable cost
The relationship varies depending on production scale
#10
Which of the following is an example of a variable cost in the production process?
Rent for factory space
Cost of raw materials
Insurance premium for the equipment
Salaries of permanent employees
#11
In the long run, what happens to a firm's fixed costs as production increases?
Fixed costs increase
Fixed costs decrease
Fixed costs remain constant
Fixed costs become variable costs
#12
What is the relationship between marginal cost (MC) and average variable cost (AVC) at the point where AVC is minimized?
MC = AVC
MC > AVC
MC < AVC
MC = 0
#13
What is the concept of 'opportunity cost' in economics?
The cost of an economic opportunity
The cost of forgoing the next best alternative
The cost of production inputs
The cost of marketing a product
#14
What does the law of diminishing marginal returns state in relation to production and costs?
As production increases, marginal returns increase indefinitely
As production increases, marginal returns initially increase but then decline
As production increases, marginal returns remain constant
As production increases, marginal returns decrease initially but then increase
#15
In the context of economic costs, what is the difference between accounting profit and economic profit?
They are synonymous terms
Accounting profit includes explicit costs, while economic profit includes explicit and implicit costs
Accounting profit includes explicit and implicit costs, while economic profit includes only explicit costs
Economic profit is always greater than accounting profit
#16
What is the relationship between average total cost (ATC) and marginal cost (MC) when ATC is at its minimum point?
MC = ATC
MC > ATC
MC < ATC
MC is undefined at the minimum point of ATC
#17
In the context of production and costs, what is the difference between explicit and implicit costs?
Explicit costs are always monetary, while implicit costs are non-monetary
Implicit costs are always monetary, while explicit costs are non-monetary
Both explicit and implicit costs are always monetary
Both explicit and implicit costs are always non-monetary