Economics Quiz

Profit equals marginal revenue minus marginal cost.

• False

• True

If the marginal cost of producing the tenth unit of output is $3, and if the average total cost of producing the tenth unit of output is $2, then at ten units of output, the average total cost is rising.

• True

• False

Economic profit is greater than or equal to accounting profit.

• True

• False

The amount a firm receives after all costs have been paid.

• Revenue

• Profit

• Marginal revenue

• Marginal profit

Measure of profit which includes both explicit and implicit costs.

• Accounting profit

• Economic profit

Measure of profit which includes explicit costs and depreciation of capital.

• Accounting profit

• Economic profit

• Marginal profit

• Total profit

A production function describes

• how a firm maximizes profits.

• how a firm turns inputs into output.

• the minimal cost of producing a given level of output.

• the relationship between cost and output.

Profit is defined as

• Net revenue minus depreciation.

• Total revenue minus total cost.

• Average revenue minus average total cost.

• Marginal revenue minus marginal cost.

What is the relationship between the quantity of inputs and quantity of output called?

• Profit function

• Production function

• Total-cost function

• Quantity function

Economists and accountants both include forgone income as a cost to a small business owner.

• True

• False