Unit 2.11 Market power - Theory of production and costs (HL)

What is the time period where at least one factor of production is fixed?

• Short run

• Long run

• Medium run

• Variable run

What is the law that states when a variable factor is added to a given set of fixed factors, there is a point where the marginal product of the extra unit falls?

• Law of increasing returns

• Law of diminishing returns

• Law of constant returns

• Law of variable returns

What is the output per unit of labor input known as?

• Average product

• Total product

• Marginal product

• Variable product

What is the opportunity cost that exists in every business decision-making situation called?

• Indirect costs

• Direct costs

• Explicit costs

• Implicit costs

Which cost is known as the stated money value arising from the use of resources by firms?

• Explicit costs

• Indirect costs

• Direct costs

• Implicit costs

What is the time period where all factors of production are variable?

• Short run

• Long run

• Medium run

• Variable run

What is the change in total product when one extra unit of labor is added called?

• Average product

• Marginal product

• Variable product

• Total product

Which cost is the opportunity cost that arises whenever a business chooses between alternatives?

• Indirect costs

• Implicit costs

• Explicit costs

• Direct costs

What is the law that only affects variable costs because they change with output?

• Law of variable returns

• Law of diminishing returns

• Law of constant returns

• Law of increasing returns

What is the time period where a business can vary both labor and capital?

• Variable run

• Short run

• Long run

• Medium run