Economics Revision Session 1 Quiz

Which of the following is an example of a decision made in the "Long Run"?

• Hiring temporary seasonal workers

• Deciding to increase the production capacity by building a new factory

• Adjusting daily production schedules

• Reducing the workforce for cost-cutting in the next quarter

What is the definition of "Short Run" in economic terms?

• The period of time over which all factors of production are variable

• The period of time over which at least one factor of production is fixed

• The period of time over which a company is profitable

• The period of time it takes to start a new business

In the context of a coffee shop, what can be done in the "Short Run" to increase production?

• Purchase more coffee machines and expand the premises

• Increase the number of coffees made by employing more labor

• Reduce the number of employees to cut costs

• Change the coffee supplier for better quality beans

What does "Long Run" refer to in business terms?

• The period of time over which a business must break even

• The period of time over which all factors of production are fixed

• The period of time over which all factors of production are variable

• The period of time needed to fully train employees

Which of the following is a possible action for a coffee shop in the "Long Run"?

• Reducing the number of coffee types offered to customers

• Employing temporary staff during peak hours

• Expanding the premises and buying more coffee machines and fridges

• Limiting the opening hours to reduce operational costs

What does the term "Marginal Cost" refer to in the context of cost curves?

• Cost incurred even when output is zero

• Cost per unit

• Additional cost of producing one more unit

• Costs varying directly with output

Which cost is described as being incurred even when the output is zero?

• Average Cost

• Marginal Cost

• Fixed Cost

• Variable Cost

What is represented by the AC curve in the cost curves diagram?

• Marginal Cost

• Fixed Cost

• Average Cost

• Variable Cost

What is a key factor contributing to falling average costs in the short-run according to the image?

• Decrease in worker productivity

• Gains from specialisation and division of labour as more workers are added

• Increase in capital costs

• Reduction in market demand

Which of the following is an example of economies of scale in the long-run as mentioned in the image?

• Decreased coordination

• Technical economies

• Lower worker morale

• Increased production time