Economics Test 1

The sum of the payments for all the factors used to produce

the good is the __________.

• cost of production

• variable factor

• factor of production

• long run

The __________is that period of time when it is not possible

to vary the quantities of all the factors of production used in the production

process.

• cost of production

• short run

• variable run

• long run

The _________ is that period of time when all factors of

production in the production process are variable.

• cost of production

• short run

• variable run

• long run

A __________ factor is one the amount of which can be varied

in the short run.

• cost

• short

• variable

• average

A ___________ factor is a factor the amount of which it is not possible

to vary in the short run.

• cost

• short

• variable

• fixed

Which of the following is not a factor of production?

• Land

• Labour

• Enterprise

• Rent

Which of the following is true in the long run?

• All factors of production are fixed.

• All factors of production are variable.

• All costs of production are fixed.

• All factors of production are variable with the exception of land.

Which of the following statements is true?

• At zero output, fixed cost is equal to total cost.

• At zero output, fixed cost is equal to variable cost.

• At zero output, variable cost is greater than fixed cost.

• At zero output, variable cost is equal to marginal cost.

Fixed costs are:

• costs that vary in the short run

• costs that never change

• costs incurred by society

• costs which do not vary with output in the short run

What is marginal cost?

• the addition to total cost when one additional unit is produced

• the cost of plant and machinery

• the cost per unit of output

• fixed cost plus variable cost