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WorksheetsProduction and Cost
Total questions: 10
Worksheet time: 5mins
Q1 How is profit calculated?
Revenue – Cost
Marginal Revenue - marginal Cost
Revenue – Marginal Cost
Marginal Revenue - Cost
Q2 What is the optimal production plan?
MR = ATC
MR = AVC
MR = MC
MC = ATC
Q3 Economic profit differs from accounting profit by
Variable Cost
Opportunity Cost
Marginal Cost
Average Cost
Q3 Economic profit differs from accounting profit by
Economic Profit is smaller
Economic profit is larger
Both are equal
Both differ by marginal cost
Q5 Marginal product of an input factor normally
Is zero at equilibrium
Is less than zero
Increases
Decreases
Q6 Why is total labor cost often increasing over proportionally?
People are lazy
Working longer hours becomes harder each extra hour
The first hour to work is the hardest
People only work for 8 hours a day
Q7 How is Average Total Cost composed?
ATC = MC + AVC
ATC = AVC + AFC
ATC = AFC - AVC
ATC + AFC = AVC
Q8 The form of the Average Fixed Cost curve is
Quadratic
Linear
Hyperbolic
Constant
Q9 Where does the Average Total Cost have its minimum?
Where the AVC curve intersects it
Where profit is maximized
Where the AFC curve intersects it
Where the MC curve intersects it
Q10 In the long run ATC
Is larger
Is smaller
Has a larger sector of constant return to scale
Is constant
