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Test Bank #2 - Test Bank labor = change in quantity change...

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P = change in quantity/ change in labor Test Bank Number 2 1. To economists, normal profit: a. must equal zero in the long run. b. equals accounting profit. c. is considered a production cost. d. equals economic profit. e. All of the above. 2. If a variable resource’s marginal product exceeds its average product, the average: 3. A period of time in which at least one resource is fixed is called the: 4. Variable costs are incurred only: 5. The value of an entrepreneur’s resources that she uses in production are known as: a. explicit costs. b. sunk costs. c. operating expenses. d. technological expenses. e. implicit costs. 6. If the average variable cost is falling, then the marginal cost must be:
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7. The marginal cost crosses the ______ at its minimum value. 8. In an increasing cost industry, the long run consequences to an increase in demand is that the market price will: 9. In the long run, to stay in business, a firm must earn: a. a positive economic profit. b. a normal profit. c. a small profit. d. at least double its costs. e. at least triple its costs. 10. If average variable costs fall as output grows: 11. Fixed costs exist in the short run because: 12. Sue Templeton owns her own business; the value of her own labor is a(n):
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13. A period of time in which at least one resource is fixed is called the: a. short run. b. long run. c. home run. d. fixed resource time period. e. profit period.
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