ECON 102 Quiz 5 Study Guide with Answers

ECON 102_Quiz 5_ Study Guide with Answers A firm’s product price multiplied by the total number of items sold is called total revenue A firm’s total revenue is equal to price multiplied by quantity. Economic profit is never larger than accounting profit Economic profit is total revenue less total opportunity costs. Total opportunity costs include both explicit and implicit costs. The extra output that the last worker hired adds to total production is called the marginal product of labor The marginal product of labor is the additional output produced by the last worker hired. The short run is a situation such that at least one input to production is fixed in quantity. In the short run at least one input is fixed. In the long run all inputs may vary. Labor Output 1 0 2 8 3 14 4 18 5 20 Consider the table above. What is the average product when 4 workers are hired? 4.5 The average product of labor is calculated as Q/L