10 Questions
What is the relationship between average fixed cost and the quantity of output?
Average fixed cost increases as the quantity of output increases
What characterizes a situation of diseconomies of scale?
Long-run average total cost rises as the quantity of output increases
What is the main property of constant returns to scale?
Long-run average total cost stays the same as the quantity of output changes
What does the marginal cost represent?
The increase in variable cost due to producing an extra unit
How does economies of scale relate to long-run average total cost?
It causes long-run average total cost to fall
What is the formula for profit for a firm?
Total Revenue - Total Cost
Which of the following best defines Implicit Costs?
Input costs that do not require an outlay of money by the firm.
What is Marginal Product in economics?
The increase in output that arises from an additional unit of input.
In economics, what do Fixed Costs refer to?
Costs that do not vary with the quantity of output produced.
What is Average Total Cost in economics?
Total Cost divided by the quantity of output.
This quiz covers the concept of Cost of Production in Economics, focusing on Total Revenue, Total Cost, Implicit Costs, Explicit Costs, and the Cost of Capital as an Opportunity Cost. Test your understanding of input costs and firm's profit calculations.
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