Solved by verified expert :31)
Can a firm’s accounting profit be smaller than the economic profit? Assume that
all costs are positive.
32)
Explain the difference between the short run and the long run.
33)
Explain the relationship between average fixed cost and marginal cost.
34)
Explain the difference between fixed costs in the short run and in the long
run.
5.2 A Firm with a Fixed Production Facility:
Short-Run Costs
1)
Diminishing marginal returns implies that
A)
marginal costs are decreasing.
B)
marginal costs are increasing.
C)
marginal costs are constant.
D)
marginal costs may be increasing or decreasing.
2)
Diminishing marginal returns implies that
A)
marginal product is decreasing.
B)
marginal product is increasing.
C)
marginal product is constant.
D)
marginal product may be increasing or decreasing.
3)
A firm experiences diminishing marginal returns because
A)
all factors of production are variable.
B)
people “learn by doing.”
C)
all factors of production are fixed.
D)
at least one factor of production is fixed.
4)
In the short run, at least one factor of production is fixed. This implies that
beyond some level of output a firm will
A)
“learn by doing.”
B)
experience diminishing marginal returns.
C)
experience increasing marginal returns.
D)
have a U-shaped long-run average cost curve.
5)
Which of the following is NOT true when the firm experiences diminishing
marginal product?
A)
The total product is decreasing.
B)
The marginal product of the previous worker is higher than the current worker.
C)
The firm is operating in the short run.
D)
The firm’s total cost is increasing.
6)
Diminishing marginal returns implies that firms
A)
require fewer and fewer workers to produce each additional unit of output.
B)
require more and more workers to produce each additional unit of output.
C)
get decreasing amounts of revenue for each unit of output they produce.
D)
get increasing amounts of revenue for each unit of output they produce.
