1. Which of the following is always true?
When marginal costs are less than average total costs, average total costs will be decreasing.
When average fixed costs are falling, marginal cots must be less than average fixed costs
When average fixed costs are rising, marginal costs must be greater than average total costs
When marginal costs are greater than average total costs, average total cost will be decreasing
2.In order for the law of diminishing returns to be present, we must have?
At least one factor of production to be fixed
Output decreasing as more laborers are hired
The rice of labor increasing as more workers are hired
Simultaneous changes in labor and capital
Double the output when also input is doubled
3.Which of the following provides the best explanation for diseconomies of scale?
The firm is too small to take advantage f specialization
Large management structures may be bureaucratic and inefficient
If there are too many employees, the work place becomes crowded and people become less productive
Average fixed costs are rising
4. The law of diminishing marginal returns explains the general shape of the firms?
Long run costs
Short run costs
Both
Nothing to do with costs
5. Long-run discectomies of scale over the range of output for which the long-run average cost curve is?
Rises
remains constant
Falls
Does not exist
6. Which of the following is true?
Economic profits are generally lower than accounting profits
They are higher than accounting profits
They are equal
Them together must equal 0