Microeconomics Unit 3 - 3.1-3.6

What is the Profit Maximizing Formula?

• Revenue > Expenses

• MR > ATC

• MR = MC

• AFC + AVC = ATC

What is the difference between Accounting (Normal) Profit and Economic Profit?

• Merchandise Costs

• Opportunity Cost

• Labor Cost

• Expenses

According to the Profit Maximizing Formula, how many units should this firm produce?

• 2

• 3

• 4

• 5

Which costs change based on the number of units produced?

• Fixed

• Variable

Which costs do not change based on the number of units produced?

• Fixed Costs

• Variable Costs

Rent and machinery are an example of which of these?

• Fixed Costs

• Variable Costs

Labor, utilities, and raw materials are an example of which of these?

• Fixed Costs

• Variable Costs

A change in Fixed Costs affect which of the following? (check all that apply)

• AFC

• AVC

• ATC

• MC

A change in Variable Costs affect which of the following? (check all that apply)

• AFC

• AVC

• ATC

• MC

Does an increase in Fixed Costs affect a firm's output?

• Yes

• No

• Maybe