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1
A firm will earn an economic profit if:
A)its total sales revenue equals the cost of labor and raw materials.
B)it produces its output utilizing the least-cost production method.
C)it is regulated by government.
D)its total sales revenue exceeds the sum of all its economic costs.
2
The distinguishing feature of the short run is that:
A)at least one input is fixed
B)output is fixed
C)input prices are variable
D)technology is variable
3
The increase in total output arising from the employment of an additional worker describes:
A)marginal cost
B)marginal revenue
C)total product
D)marginal product
4
The WXY Corporation has fixed costs of $50. Its total variable costs (TVC) vary with output as shown in the following table.

Output

TVC

1

$   0

2

   70

3

  110

4

  160

5

  220


Refer to the table. The average total cost of 4 units of output is:
A)$27.50
B)$40.00
C)$52.50
D)$210.00
5
Which one of the following short-run cost curves would not be affected by an increase in the wage paid to a firm's labor?
A)Average variable cost
B)Average fixed cost
C)Average total cost
D)Marginal cost
6
As output rises, fixed costs:
A)remain constant as they contribute to the production of goods and services.
B)continue to rise as more and more output is produced.
C)fall.
D)experience none of the above.
7
Answer the next question based on the cost data in the following table:

Output

Average fixed cost

Average variable cost

1

$120

$40

2

60

30

3

40

25

4

30

30

5

24

40

6

20

55



Refer to the data. The total cost of producing 5 units of output is:
A)$64
B)$200
C)$320
D)$400
8
The WXY Corporation has fixed costs of $30. Its total variable costs (TVC) vary with output as shown in the following table.

Output

TVC

1

$    0

2

   70

3

  110

4

  160

5

  220


Refer to the table. The marginal cost of the fourth unit of output is:
A)$30
B)$40
C)$50
D)$60
9
Diminishing returns occur in the _______ and diseconomies of scale occur in the __________.
A)long run; long run
B)long run; short run
C)short run; long run
D)short run; short run
10
Which one of the following must increase if output decreases?
A)Marginal cost
B)Average fixed cost
C)Average variable cost
D)Average total cost





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