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When economic profits in an industry are zero and implicit cost are greater than zero
accounting profits will be greater than zero
Suppose a firms sells its product at a price lower than the opportunity cost of the inputs used to produce it. Which of the following is true
The firm may earn accounting profits , but will face economic losses
Economic profits for a company is defined as the total revenues of the firm minus the
opportunity cost of all resources
In the short run, output
can vary as the result of using a fixed amount of plant and equipment more or less intensively
The main difference between the short run and the long run is that
in the short run, one or more is fixed
According to the law of diminishing marginal returns, eventually
the additional outputs generated by additional units of an input will diminish
Which of the following relationships will NOT result from the diminishing marginal returns
diseconomies of scale
Which of the following is true
Underlying the law of diminishing returns is the assumption that at least one input remains fixed
Diminishing returns are observed as a firm increases production by adding variable to at least one fixed input because
as more variable inputs are hired, the amounts of the fixed inputs per variable input they have to work with decreases
The law of diminishing returns implies
eventually, the more hours you spend studying per day, the less you will learn with an added hour
A professional bowler knows that practicing four hours a day will allow her to play better than if she practices three hours a day. Yet she does not practice that fourth hour. From this we can conclude that
that added benefit to her of the additional hour of practice is less than the added cost
The law of diminishing returns only applies in cases where
there is at least one fixed factor of production
In the short run, total product begins to decrease at the point where the
marginal products of labor is zero
Over the range of positive, but diminishing, marginal returns for an inputs, the total product curve
rises at a decreasing rate
When the average variable cost if an inputs exceeds the marginal cost, assuming the quantities of all other inputs are fixed, the average product
of that inputs is less than the marginal product
At the "Amarillo piano company", the average products of labor equals 5, regardless of how much labor is used. We can say that
That marginal product of labor is 5 regardless of how many workers are hired
At what point does marginal product equal average product
where marginal product is equal to its minimum value
When marginal product reaches its maximum, what can be said of total product
total product is increasing if marginal product is positive
At the point where diminishing marginal returns to a factor of production set in
the marginal product starts to decrease
The marginal product of a factor if production is measured by
the marginal product curve approaches the average product curve from above.
At what point in the graph below does the law of diminishing returns set in (see question 42)
Which of the following is the best example of a fixed cost of production to a firm
depreciation of capital
The level of fixed cost of production for a firm
is independent of the level of output in the short run
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