True or False? 1.The total amount of good X a firm produces divided by the numbe
ID: 1223081 • Letter: T
Question
True or False?
1.The total amount of good X a firm produces divided by the number of workers employed by the firm is its marginal product.
2.If a monopolist is producing at that output at which price equals average-variable cost in the short run, then the firm is breaking even.
3.In the short run, the size (or capacity) of a firm's plant is variable.
4.When total product is at a maximum, marginal product is equal to zero.
5.If social costs exceed private costs, then a positive externality exists
6.The market supply in an increasing cost industry is horizontal.
7.Accounting profit takes into account only the implicit costs while economic profit does not.
8.When average costs are increasing, marginal costs are greater than average costs.
9.When total product is at a maximum, marginal product is equal to zero.
10.The cost that does not vary with the quantity of output that a firm produces is average fixed cost.
Explanation / Answer
1. The total amount of good X a firm produces divided by the number of workers employed by the firm is its marginal product. : False. Marginal product is production of extra units of a product by employing an extra unit of labor.
2. If a monopolist is producing at that output at which price equals average-variable cost in the short run, then the firm is breaking even. : False. At break even all costsare covered.
3. In the short run, the size (or capacity) of a firm's plant is variable: False, in short run plant is fixed and can be varied in long run.
4. When total product is at a maximum, marginal product is equal to zero: True. Because after employing more input total product will starts falling.
5. If social costs exceed private costs, then a positive externality exists: False. It is kind of Negative externality.
6. The market supply in an increasing cost industry is horizontal: Ture.
7. Accounting profit takes into account only the implicit costs while economic profit does not: False. Economic profit considers implcit cost that is opportunity cost.
8. When average costs are increasing, marginal costs are greater than average costs: True.
9. When total product is at a maximum, marginal product is equal to zero: True. Because after employing more input total product will starts falling.
10. The cost that does not vary with the quantity of output that a firm produces is average fixed cost: False. It is fixed cost.
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