ECN 212 CERTIFICATION STUDY GUIDE 2026 COMPREHENSIVE QUESTIONS AND VERIFIED ANSWERS

ECN 212 CERTIFICATION STUDY
GUIDE 2026 COMPREHENSIVE
QUESTIONS AND VERIFIED
ANSWERS
◉ Explicit costs Answer: Input costs that require and outlay of money
by the firm.


◉ Implicit costs Answer: Input costs that doesn't require an outlay of
money by the firm.


◉ What is the formula to calculate total cost? Answer: EXPLICIT
COSTS + IMPLICIT COSTS


◉ What is the implicit costs for every business? Answer: The
opportunity cost.


◉ Production function Answer: Shows the relationship between the
quantity of inputs used to make the good and the quantity of outputs of
the good.


◉ Marginal product Answer: An increase in output that arises from an
additional unit of input.


◉ Total cost curve is between what? Answer: Total cost and quantity of
output.

, ◉ What happens to the cost curve and production function as production
rises? Answer: - The cost curve gets steeper
- The production function gets flatter


◉ What is the formula for average total cost? Answer: TOTAL
COST/QUANTITY


◉ What is the formula to calculate average fixed cost? Answer: FIXED
COST/QUANTITY


◉ What is the formula to calculate average variable cost? Answer:
VARIABLE COST/QUANTITY


◉ What is the formula to calculate marginal cost? Answer: CHANGE
IN TOTAL COST/CHANGE IN QUANTITY


◉ What happens to the marginal cost when quantity of output increases?
Answer: When quantity of output increases then the marginal cost will
also increase. It is upward sloping but faces diminishing marginal
product.


◉ What happens to the AFC and AVC as quantity of output increases?
Answer: - As quantity of output increases AFC decreases due to FC
- As quantity of output increases AVC increases due to diminishing
marginal product