Eco LU5-7

What is the primary economic goal of a firm?

• Maximize revenue

• Maximize profits

• Minimize costs

Which of the following best defines total revenue?

• The market value of inputs used in production

• The amount a firm receives for the sale of its output

• The total cost of producing goods and services

What does the term "opportunity cost" refer to in the context of production costs?

• Only the explicit costs of production

• Only the implicit costs of production

• Both explicit and implicit costs of production

Which of the following is an example of an explicit cost?

• The salary the owner could have earned working elsewhere

• The cost of raw materials

• The time invested by the owner in managing the business

How is economic profit different from accounting profit?

• Economic profit includes only explicit costs, while accounting profit includes both explicit and implicit costs.

• Economic profit includes both explicit and implicit costs, while accounting profit includes only explicit costs.

• Economic profit and accounting profit are the same.

What does the production function show?

• The relationship between the quantity of inputs and the quantity of output

• The relationship between total revenue and total cost

• The relationship between fixed costs and variable costs

What is the marginal product of an input?

• The total output produced by all inputs

• The increase in output from using an additional unit of input

• The average output per unit of input

What is diminishing marginal product?

• The increase in output as more inputs are added

• The decrease in output as more inputs are added

• The decrease in the marginal product as more inputs are added

What does the total-cost curve show?

• The relationship between the quantity of output and total cost

• The relationship between fixed costs and variable costs

• The relationship between marginal cost and average cost

What happens to the production function as marginal product declines?

• It becomes steeper

• It becomes flatter

• It remains the same