Question

Suppose a firm doubles the amount of all of its factors of production and, as a result, output increases from 100 to 300 units. This firm is operating under

1. Increasing cost
2. Decreasing costs
3. Long-run decreasing returns
4. Decreasing total cost
5. Diseconomies of scales

Positive economic profit is

1. The excess of revenues over implicit costs
2. A signal for firms in other industries to expand their output
3. A signal for resources to enter the industry in the long run
4. The excess of revenues over explicit costs
5. The money income of the firm’s owner

A production function in economics means

1. The relationship between inputs and outputs
2. Any function performed by an employee when producing output
3. The various functions performed by all employees when producing output
4. The function performed by the person in charge of the production process
5. All of the above

Which of the following is the best measure of productivity?

1. Total output per dollar of revenue
2. Total output
3. Total output per unit of resource input
4. Total profit per unit of output
5. Total output per hour

Answer 1

- b.decreasing cost

- c. A signal for resources to enter the industry in the long run.

- a. The relationship between inputs and outputs

- c. Total output per unit of resource input.