FINAL QUIZ Flashcards
To maximize total profit, farms or ranches should produce the level of output at which average total cost per unit is minimized. (T/F)
F
In the short run, production should be discontinued whenever
total revenue is less than total cost.
total revenue is less than total variable cost.
total revenue is greater than total fixed cost.
total revenue is less than total fixed cost.
total revenue is less than total variable cost.
There are increasing returns to size whenever increasing the output of the business results in
a smaller average cost per unit of output.
the same average cost per unit of output.
a larger average cost per unit of output.
increased total profit.
a smaller average cost per unit of output.
Diseconomies of size can result from
producing more units with some of the same fixed quantities of resources.
larger operations being subject to more environmental constraints.
increased purchasing power when buying inputs.
allowing some workers to specialize in a few tasks.
larger operations being subject to more environmental constraints.
The marginal cost curve
is constant regardless of output level.
has the same shape as a marginal revenue curve.
will eventually increase as output is increased.
will eventually decrease as output is increased.
will eventually increase as output is increased.
Variable costs are those costs that:
increase or decrease in proportion to the units of an enterprise that are carried out
change from one year to the next
occur even if an enterprise is not carried out
occur only in unusual cases
increase or decrease in proportion to the units of an enterprise that are carried out
In the short run
total fixed costs are zero when there is no production.
total costs are zero when there is no production.
total variable costs are zero when there is no production.
neither total fixed costs nor total variable costs are zero when there is no production.
total variable costs are zero when there is no production.
Depreciation is classified as a cash expense. (T/F)
F
The zero-profit price for a firm is equal to the minimum ATC. (T/F)
T
When price falls below the minimum average variable cost, a producer should not produce. (T/F)
T
