6-Opportunity cost is: a.The variable cost a firm incurs by increasing output on

Question

6-Opportunity cost is: a.The variable cost a firm incurs by increasing output one unit. b.The value of the best alternative use of a firm’s resources. c.The output opportunities a firm gains when average fixed costs decline. d.Another name of explicit costs. e.The difference between fixed cost and variable cost. 7.The basic difference between explicit and implicit costs is: a.Explicit costs are measurable, implicit costs are not. b.Implicit costs are measurable, explicit costs are not. c.Explicit costs are private costs, implicit costs are social costs. d.Explicit costs are fixed costs, implicit costs are variable costs. e.Explicit costs reflect externally supplied resources, implicit costs reflect owner-supplied resources. 8.Costs functions show: a.That one of the functions of production is to incur costs. b.The relationship between various costs of production and output. c.The amount of output per unit of input. d.The demand for factors of production. e.How production costs are derived from input-output price ratios. 9.The distinction between the short run and the long run is: a.Strictly a calendar matter- the long run being over the years. b.Is dependent solely on the time period necessary to vary all relevant inputs. c.That in the short run, neither inputs nor outputs can be changed. d.That the law of diminishing marginal returns is operational in the long run, but not in the short run. e.Operationally meaningless since firms continually plan for the future. 10.Short-run costs which do not change as output increases or decreases are called: a.Explicit costs b.Fixed costs c.Empirical costs d.Marginal costs e.Primary costs

Explanation / Answer

6. Option b

7. Option e

8. Option b

9. Option b

9. Option b

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