MCQS:1. A firm is said to be earning normal profit whenever:A. Accounting profit is zero.B. Economic profit is positive.C. Accounting profit is positive.D. Total revenue equals explicit and implicit costs.2. If a 10% increase in inputs results in a 20% increase in output, then the firm is said to exhibit:A. Diseconomies of scaleB. Diminishing marginal returns to scaleC. Constant returns to scaleD. Economies of scale3. Economists have traditionally attempted to avoid the trap of:A. Thinking in terms of total utility.B. Computing marginal utilityC. Making interpersonal utility comparisons.D. None of the above.4. According to the water-diamond paradoxA. Water has a lower MU than Diamond.B. Water has a higher TU than Diamond.C. Prices reflect MU and not TUD. All of the above.

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1. A firm is said to be earning normal profit whenever: A. Accounting profit is zero. B. Economic profit is positive. C. Accounting profit is positive. D. Total revenue equals explicit and implicit costs.

1. A firm is said to be earning normal profit whenever: A. Accounting profit is zero. B. Economic profit is positive. C. Accounting profit is positive. D. Total revenue equals explicit and implicit costs.

Survey Of Economics

10th Edition

ISBN:9781337111522

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter6: Proudction Costs

Section: Chapter Questions

Problem 7SQ

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Concept explainers

Cost of Production

In economic theory, production costs are the costs incurred by an industrial organization when it engineers a project or provides a service that generates revenue and benefits. Labor costs, raw materials, consumable manufacturing costs, and general overhead sum up, accounting for production costs. Total cost data is calculated by combining total direct costs of materials, labor costs, and total production costs.

Question

MCQS:
1. A firm is said to be earning normal profit whenever:
A. Accounting profit is zero.
B. Economic profit is positive.
C. Accounting profit is positive.
D. Total revenue equals explicit and implicit costs.
2. If a 10% increase in inputs results in a 20% increase in output, then the firm is said to exhibit:
A. Diseconomies of scale
B. Diminishing marginal returns to scale
C. Constant returns to scale
D. Economies of scale
3. Economists have traditionally attempted to avoid the trap of:
A. Thinking in terms of total utility.
B. Computing marginal utility
C. Making interpersonal utility comparisons.
D. None of the above.
4. According to the water-diamond paradox
A. Water has a lower MU than Diamond.
B. Water has a higher TU than Diamond.
C. Prices reflect MU and not TU
D. All of the above.

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