Economics: Production Factors and Marginal Analysis Quiz

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When are diminishing marginal returns to a factor of production most likely to occur?

One factor is increased and all others are fixed (correct)

One factor is fixed and all others are increased in equal proportion

All factors are increased in equal proportion

One factor is decreased and all others are fixed

What is the increase in total cost associated with a one-unit increase in production?

Marginal cost (correct)

Marginal revenue

Marginal utility

Marginal physical product

What is the opportunity cost of an investment in new farm equipment associated with?

The increase in farm income generated by the new equipment minus the costs of operating it

The amount of income that new equipment will generate

The income that could have been obtained by using the investment expenditure in its next most profitable activity (correct)

The lost opportunity to spend more money on clothes and vacations

Which of the following is a variable cost?

Fuel costs Signup and view all the answers

What type of income is the money received from the sale of raised cull beef cows?

Capital gains Signup and view all the answers

What is the purpose of liability insurance?

Legal action Signup and view all the answers

What type of business would distribute patronage refunds?

Cooperative Signup and view all the answers

Which type of expenses would not be accounted for on an income statement?

Principal payments Signup and view all the answers

What does an outward shift of the supply curve for peanuts NOT cause?

The demand for peanuts to increase Signup and view all the answers

When using options, what is the futures price you want to fix?

Strike price Signup and view all the answers

Economics: Production Factors and Marginal Analysis Quiz

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Questions and Answers

When are diminishing marginal returns to a factor of production most likely to occur?

What is the increase in total cost associated with a one-unit increase in production?

What is the opportunity cost of an investment in new farm equipment associated with?

Which of the following is a variable cost?

What type of income is the money received from the sale of raised cull beef cows?

What is the purpose of liability insurance?

What type of business would distribute patronage refunds?

Which type of expenses would not be accounted for on an income statement?

What does an outward shift of the supply curve for peanuts NOT cause?

When using options, what is the futures price you want to fix?

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