(A) the additional profit the firm earns when it sells an additional unit of output.
(B) the added revenue that a firm takes in when it increases output by one additional
unit.
(C) the difference between total revenue and total costs.
(D) the ratio of total revenue to quantity.
Tag: Economics Mcqs With Answers
The formula for AVC is?
(A) q/TVC.
(B) dTVC/dq.
(C) dq/dTVC.
(D) TVC/q.
The formula for average fixed costs is?
(A) dTFC/dq.
(B) TFC/q.
(C) q/TFC.
(D) TFC – q.
A graph showing all the combinations of capital and labour available for a given total cost is the?
(A) budget constraint.
(B) isoquant.
(C) expenditure set.
(D) isocost line.
The rate at which a firm can substitute capital for labour and hold output constant is the?
(A) law of diminishing marginal returns.
(B) marginal rate of technical substitution.
(C) marginal rate of substitution.
(D) marginal rate of production.
A graph showing all the combinations of capital and labour that can be used to produce a given amount of output is?
(A) an isocost line.
(B) a production function.
(C) an isoquant.
(D) an indifference curve.
Suppose Isa Khan’s Ice Cream experiences economies of scale up to a certain point and diseconomies of scale beyond that point. Its long-run average cost curve is most likely to be?
(A) upward sloping to the right.
(B) U-shaped.
(C) horizontal
(D) downward sloping to the right.
Engineers for Imran Bike Company have determined that a 15% increase in “all” inputs will cause a 15% increase in output. Assuming that input prices remain constant, you correctly deduce that such a change will cause __ as output increases.
(A) Long-run average costs to increase
(B) Long-run marginal costs to increase
(C) Long-run average costs to remain constant
(D) Long-run average costs to decrease