MUFY REVISION QUIZ

Economic profit is

• total revenue - implicit cost

• total revenue - explicit cost

• total revenue - implicit cost - explicit cost

• total revenue + explicit - implicit cost

Ariel's apartment previously rented out for $900 is now being used for her homebased business. The rental is an

• implicit cost

• explicit cost

• external cost

In the short-run, a production has

• only variable inputs

• only fixed inputs

• variable and fixed inputs

When additional labour is added into a production with fixed capital input, the additional output produced declines. This refers to

• the law of demand

• the law of diminishing return

• the economies of scale

• the law of diminishing cost

In the short-run, marginal cost decreases initially due to

• division of labour

• overcrowding

• labour inefficiency

• economies of scale

Productive efficiency occurs at the

• lowest average cost

• highest marginal product

• price equivalent to marginal cost

• lowest marginal cost

When marginal cost curve is above average cost curve,

• the average cost decreases

• the average cost increases

• the marginal cost decreases

Which is NOT a factor of economies of scale?

• marketing cost spread over the output

• technical difficulties and maintenance

• labour specialisation

• bulk purchases of supplies

The long-run __________ cost decreases when economies of scale is achieved.

• average

• total

• marginal

• explicit

Which of the following is the way to calculate average fixed cost?

• total cost minus total variable cost

• average variable cost minus average total cost

• total fixed cost divided by quantity of labour

• total fixed cost divided by output