Economics Final Quiz

All of the following are barriers to entry for new firms to enter an industry except

• Price restrictions

• High cost of entry

• Legal restrictions

• Entry restrictions

Increasing one factor input without changing the other results in

• Diminishing returns

• Increasing returns

• Decreasing returns

• Negative returns

When Average Product and Marginal Product is equal, the Average Product is at its

• Zero

• Negative

• Maximum

• Minimum

When returns to scale is decreasing, total output

• Does not change

• Decreases

• Increase

• It depends

In constant returns

• Marginal product is constant

• Average product is constants

• Total product is constant

• Total product increase in lesser amount

An engineer gives up his P300,000/year job to go into direct selling. P300,000 is his

• Explicit cost

• Implicit Cost

• Opportunity Cost

• Fixed Cost

A period in which production inputs are fixed since conditions have not yet changed such as plant size.

• Short-run

• Medium-run

• Long-run

• Fixed period

Which of the following is least likely to be a variable cost?

• Insurance payments

• Cost of raw materials

• Wages of production workers

• Utility costs

The Law of Diminishing Returns is due to

• Changing resources efficiency

• Resource limitations

• Increasing resources

• Changing resource mix

The term production function refers to the:

• relationship between input and output

• use of machines in production

• purposes and functions of production

• effect of automation or productivity