Unit 2 - Practice Quiz

1 Which of the following best defines Opportunity Cost?

2 Costs that involve a direct monetary outlay or payment to outsiders are known as:

3 A cost that has already been incurred and cannot be recovered is called a:

4 Economic Profit is calculated as:

5 In the context of the production function, the Short Run is defined as a period where:

6 The functional relationship between physical inputs and physical output is known as:

7 Which law governs production in the short run with one variable input?

8 In the Law of Variable Proportions, the Point of Inflection occurs where:

9 When Total Product (TP) is at its maximum, Marginal Product (MP) is:

10 Which of the following describes Stage II of the Law of Variable Proportions?

11 A rational producer will always operate in which stage of the Law of Variable Proportions?

12 If the production function exhibits Constant Returns to Scale, doubling all inputs will result in:

13 Total Fixed Cost (TFC) curve is:

14 Which cost curve is known as a Rectangular Hyperbola?

15 Total Cost (TC) in the short run is the sum of:

16 Marginal Cost (MC) is defined as:

17 The vertical distance between the Total Cost (TC) curve and the Total Variable Cost (TVC) curve is equal to:

18 When Average Cost (AC) is falling, what is the relationship between AC and Marginal Cost (MC)?

19 The Marginal Cost (MC) curve cuts the Average Cost (AC) curve at:

20 Which of the following curves is NOT U-shaped?

21 The Long Run Average Cost (LAC) curve is also called the:

22 Internal Economies of Scale occur due to:

23 If a firm doubles its inputs and output increases by less than double, it is experiencing:

24 The formula for Break-Even Point (BEP) in units is:

25 Contribution Margin is defined as:

26 At the Break-Even Point, Total Revenue (TR) is equal to:

27 The Margin of Safety is calculated as:

28 The Profit-Volume (P/V) Ratio is calculated as:

29 An increase in Fixed Costs, assuming other factors remain constant, will:

30 Which of the following represents an Implicit Cost?

31 Variable inputs are those that:

32 When Average Product (AP) is decreasing, Marginal Product (MP) is:

33 The shape of the Total Product (TP) curve in the first stage of production is:

34 Incremental costs are most similar to which other cost concept?

35 In a Break-Even Chart, the Angle of Incidence indicates:

36 If Selling Price is $20$, Variable Cost is $12$, and Fixed Cost is $10,000$, the Break-Even Point in units is:

37 The Shut-down point in the short run for a firm occurs when Price is equal to:

38 Accounting Profit is generally ____ than Economic Profit.

39 In the long run, there are no:

40 Which curve indicates the minimum unit cost of producing any given volume of output in the long run?

41 Managerial diseconomies of scale arise primarily due to:

42 The derivative of the Total Cost function with respect to Quantity () gives:

43 If the P/V ratio is 40% and Fixed Cost is $40,000$, what is the Break-Even Sales volume?

44 The law of variable proportions is also known as:

45 Isoquants are to production what ____ are to consumption.

46 Social Cost is defined as:

47 When Total Product is falling, Marginal Product is:

48 The difference between Total Revenue and Total Variable Cost is known as:

49 Which of the following cost curves is never U-shaped?

50 If a firm wants to lower its Break-Even Point, it should: