Rational producer behaviour

Salary given to permanent staff is an example of

• fixed and explicit cost

• fixed and implicit cost

• variable and explicit cost

• variable and implicit

In the short run, which of the following costs must continuously decrease as output produced increases? 

• Total variable cost 

• Total fixed cost 

• Average variable cost 

• Average fixed cost 

Draw the MC curve and AC curve

Average revenue is equal to

• Price

• Total revenue

• Total fixed cost

• Price Elasticity of Demand

• MR

• AR

• MC

• AC

How do you call a situation where total revenue is greater than total cost?

• abnormal profit

• normal profit

• zero economic profit

• economic profit

What is the level of production on the diagram at which a firm makes a profit on every extra unit produced ?

• 0 q1

• 0 q2

• q1 q3

• q3 q4

Why firms may not focus on profit maximization?

• because of the CSR

• because of satisficing

• because it's not profitable

• because of scarcity of resources

What is meant by growth maximization?

• companies set their target to achieve

  growth in the long run, rather than profits

• a goal of big firms buying off the smaller companies who are a competition

• companies may set their target to achieve

  growth in the short run, rather than profits

What is CSR?

• Corporate Social Responsibility

• Corporate Social Resources

• one of the greenwashing policies that firms may adapt to attract consumers

• ethical code of firms

  that accepts responsibility for the impact of its activities