 |
1 | |
The following is not a type of firm |
|
| | A) | sole trader |
| | B) | ice-cream van |
| | C) | partnership |
| | D) | company |
|
2 | |
The opportunity cost of a student is |
|
| | A) | course fees and rent |
| | B) | a loan from the bank |
| | C) | what the student could have earned in the best job available by not studying |
| | D) | what the student will earn after graduation |
|
3 | |
Firms are assumed to _________ costs and to _________ profits |
|
| | A) | incur, desire |
| | B) | pay, make |
| | C) | charge, earn |
| | D) | minimize, maximize |
|
4 | |
The increase in total cost when one more unit is produced is known as |
|
| | A) | marginal cost |
| | B) | opportunity cost |
| | C) | limited cost |
| | D) | average cost |
|
5 | |
Marginal revenue is the _________ when output is ____________ |
|
| | A) | change in average revenue, increased |
| | B) | change in total revenue, increased by one unit |
| | C) | change in average revenue, increased by one unit |
| | D) | change in total revenue, increased |
|
6 | |
Profits are maximised when _________________ |
|
| | A) | costs are minimised |
| | B) | revenue is maximised |
| | C) | average cost is less than average revenue |
| | D) | marginal cost equals marginal revenue |
|
7 | |
If a firm's wage costs increase this will cause __________ and ________ |
|
| | A) | marginal cost to increase, output to fall |
| | B) | marginal revenue to increase, output to fall |
| | C) | opportunity cost to increase, the firm will close |
| | D) | average cost will rise, output will increase |
|
8 | |
An upward shift in marginal cost ________output and an upward shift in marginal revenue ________ output |
|
| | A) | reduces, reduces |
| | B) | reduces, increases |
| | C) | increases, increases |
| | D) | increases, reduces |
|
9 | |
If both marginal cost and marginal revenue increase, a firm __________ |
|
| | A) | should increase output |
| | B) | should reduce output |
| | C) | will require further information on how to respond |
| | D) | should not change output |
|
10 | |
Companies are run by shareholders and owned by the board of directors |
|
| | A) | TRUE |
| | B) | FALSE |
|
11 | |
If a firm is producing a level of output where marginal cost is greater than marginal revenue, it should increase output to maximise profits |
|
| | A) | TRUE |
| | B) | FALSE |
|
12 | |
A firm should close down if profits are zero |
|
| | A) | TRUE |
| | B) | FALSE |
2002 A McGraw-Hill Online Learning Centre