Question

28. Total revenue minus explicit costs equal: a. Accounting profit b. Normal profit c. Economic profit d. Both a and b

29. Normal profit is just another way of saying the firm is earning: a. An economic profit b. A zero economic profit c. An accounting profit d. None of the above

30. Which of the following describes the Average-Marginal rule: a. When the marginal magnitude is greater than the average, the average is rising; when the marginal magnitude is below the average magnitude, the average is declining. b. When the marginal magnitude is greater than the average, the average is declining; when the marginal magnitude is below the average magnitude, the average is increasing. c. Is total cost divided by quantity d. Is total marginal costs divided by quantity

31. As Marginal Physical Product rises, Marginal Cost: a. rises b. falls c. remains constant d. none of the above

32. An input whose quantity cannot be changed as output changes describes: a. A variable input b. The short run c. A fixed input d. The law of diminishing marginal returns

33. When would total costs equal fixed costs? a. When there are no variable costs b. When variable costs equal fixed costs c. When variable costs equal 100 for most firms. d. None of the above

34. If Price = $20, quantity = 400 units, unit cost = $15, implicit costs = $4,000. What does economic profit equal? a. $2,000 b. $4,000 c. -$2,000 d. $8,000

35. If economic profit equals accounting profit, what do implicit costs equal? a. Explicit costs b. Total costs c. Marginal costs d. Zero e. None of the above 3. 4. If economic profit equals accounting profit, what do implicit costs equal? 5. If accounting profit is $400,000 greater than economic profit, what do implicit costs equal? 6. If marginal physical product is continually declining, what does marginal cost look like? Explain your answer. 7. If the ATC curve is continually declining, what does this imply about the MC curve? Explain your answer.

Answer 1