American Military University ECON 201 ECON201

American Military University ECON 201 ECON201 WEEK 5 Quiz Question 1 of 20 Average variable cost is: • A. the firm's variable cost per unit multiplied by the quantity. • B. total variable cost divided by quantity. • C. the difference between average total cost and total variable cost. • D. the difference between total cost and total variable cost. Question 2 of 20 Which of the following is (are) correct? • A. Firms are organizations that produce goods and services. • B. Firms seek to maximize profits. • C. Firms seek to utilize factors of production in the most efficient way in order to maximize profits. • D. All of the above are correct. Question 3 of 20 For a restaurant: • A. labor and food would be variable factors of production. • B. a building would be a fixed factor of production in the short run. • C. fire insurance on a building would be a fixed factor of production. • D. A and B are correct. Question 4 of 20 Diminishing marginal returns means that: • A. each additional unit of an input used will decrease output. • B. each additional unit of an input used will increase output, but by smaller and smaller amounts. • C. each additional unit of an input used will increase output by larger and larger amounts. • D. the firm is maximizing profit.