Quiz on Short Run and Long Run Costs

What is the short run in economics?

• A period when all factors of production are variable

• A period when some factors of production are fixed

• A period of infinite time

• A period with no fixed factors

Which factor is considered fixed in the short run?

• Raw materials

• Land

• Labour

• Technology

What does the long run allow in terms of production factors?

• All factors can be changed

• Only fixed factors can be changed

• No factors can be changed

• Only labour can be changed

What is the long run average cost curve known as?

• A straight line

• A fluctuating curve

• An envelope curve

• A downward curve

What does the economist's view of cost focus on?

• Actual money spent

• Opportunity cost

• Fixed costs only

• Variable costs only

How does an accountant view cost?

• In terms of opportunity cost

• In terms of actual payments made

• In terms of fixed costs

• In terms of variable costs

What does total revenue (TR) refer to?

• The total profit made

• The total cost of production

• The total amount of money realized from sales

• The total amount of money spent

What is average revenue (AR)?

• Total cost divided by quantity sold

• Total profit divided by quantity sold

• Total revenue multiplied by quantity sold

• Total revenue divided by quantity sold

What does marginal revenue refer to?

• Change in total revenue due to a change in sales by one unit

• Total revenue from all sales

• Average revenue from all units sold

• Total cost of production

If total revenue increases from $2000 to $2500 due to a sale of one extra unit, what is the marginal revenue?

• $500

• $2500

• $1000

• $2000