Economics Quiz: Production and Time Periods

Firms in Industries

• In the intermediate run, firms can neither enter nor leave an industry.
• In the short run, at least one resource is fixed and others are variable.

Production Function and Costs

• Fixed costs are fixed, whereas variable costs vary with the quantity produced.
• The break-even point is the quantity at which total revenue equals total cost.
• In the given example, the break-even point is 5,000 units, where fixed costs are 15,000,variablecostperunitis15,000, variable cost per unit is 15,000,variablecostperunitis5, and selling price per unit is $10.

Market Structures

• The main difference between monopolistic and perfect competition is the market power of competitors.
• In a monopoly, there are no competitors on the relevant market, and input barriers are low.

Consumer Theory

• Total utility coincides with marginal utility at the level of the last unit consumed.
• If the demand for a product increases from 70 to 75 units when the price is reduced from 100 to 90 lei, the demand is elastic.
• A vertical demand curve is perfectly inelastic.
• An indifference curve represents equal utility from the consumption of two combinations of goods.

National Income

• Gross National Product is Gross Domestic Product plus net property income from abroad.
• Net National Product is Gross National Product minus depreciation.
• Real national income is nominal national income adjusted for inflation.

Time Value of Money

• A unit of money obtained today is worth more than a unit of money obtained in the future due to the time value of money.