Economics 1141 Self Test Questions With
Complete Answers
additional output produced by each worker - ANSWER marginal product
amount each additional unit of output adds to total revenue - ANSWER marginal
revenue
cost of increasing (or decreasing) the level of output by one unit - ANSWER marginal
cost
unchanging costs that include interest, insurance, taxes, rent, and executive salaries -
ANSWER fixed costs
changing costs that include labor, raw materials, and utilities - ANSWER variable costs
costs that represent alternative uses of production factors - ANSWER opportunity costs
costs that include raw materials, fuel, labor, equipment, buildings, and machinery -
ANSWER accounting costs
lower production costs incurred by a larger firm - ANSWER economies of scale
, higher production costs incurred when a firm exceeds its optimum size - ANSWER
diseconomies of scale
the formula describing the point at which a perfectly competitive firm maximizes profit -
ANSWER MC = MR = P
formula for determining average fixed costs - ANSWER FC/Q
formula for determining average variable costs - ANSWER VC/Q
formula for determining profit - ANSWER TR - TC
involves entrepreneurship and administration - ANSWER management
man-made instruments of production - ANSWER capital
materials provided by God - ANSWER natural resources
workers - ANSWER labor
physical characteristics of the market within which firms interact - ANSWER market
Complete Answers
additional output produced by each worker - ANSWER marginal product
amount each additional unit of output adds to total revenue - ANSWER marginal
revenue
cost of increasing (or decreasing) the level of output by one unit - ANSWER marginal
cost
unchanging costs that include interest, insurance, taxes, rent, and executive salaries -
ANSWER fixed costs
changing costs that include labor, raw materials, and utilities - ANSWER variable costs
costs that represent alternative uses of production factors - ANSWER opportunity costs
costs that include raw materials, fuel, labor, equipment, buildings, and machinery -
ANSWER accounting costs
lower production costs incurred by a larger firm - ANSWER economies of scale
, higher production costs incurred when a firm exceeds its optimum size - ANSWER
diseconomies of scale
the formula describing the point at which a perfectly competitive firm maximizes profit -
ANSWER MC = MR = P
formula for determining average fixed costs - ANSWER FC/Q
formula for determining average variable costs - ANSWER VC/Q
formula for determining profit - ANSWER TR - TC
involves entrepreneurship and administration - ANSWER management
man-made instruments of production - ANSWER capital
materials provided by God - ANSWER natural resources
workers - ANSWER labor
physical characteristics of the market within which firms interact - ANSWER market
