22. If a firm experiences lower costs per unit as it increases production in the long run this is an example of: A) increasing returns to scale. B) decreasing returns to scale. C) increasing opportunity costs. D) scale reduction.

21. In the long run: A) the firm considers all factors as fixed. B) the firm considers all factors as variable. C) production choices are more limited than in the short run. D) production is always greater than zero.

19. The U-shape of the long-run average total cost curve is primarily due to: A) technological change. B) economies and diseconomies of scale. C) increasing and then diminishing returns. D) diminishing returns.

18. A firm that is able to more efficiently utilize by-products as it increases production in the long run is an example of: A) economies of scale. B) diseconomies of scale. C) labor-intensive production D) capital-intensive production

16. When marginal cost is below average variable cost, average variable cost must be: A) at its minimum. B) at its maximum. C) falling D) rising

15. Oscar has negotiated a lease for his sporting goods store in which he is required to pay 2,500 per month in rent.Oscar pays his staff 9 per hour to sell sporting goods and his monthly electricity bill averages 700 depending on his total hours of operation. Oscar's fixed costs of production equal: A) 2,500 per month. B) 3,200 per month. C) 9 per hour multiplied by total hours of work plus 700. D) 9 per hour multiplied by total hours of work plus 3,200

14. The marginal cost curve is the mirror image of the: A) total product curve. B) average product curve. C) marginal product curve. D) average total cost curve.

13. Diminishing returns to an input set in: A) when all inputs are fixed. B) when some inputs are fixed and some are variable. C) when all inputs are variable. D) only in the long run.

9. Whenever MBlt MC the decision maker should do __ of the activity. A) Less B) the same amount C) More D) None

7. The implicit cost of capital is: A) the expense associated with leasing machines. B) the expense associated with buying machines. C) the opportunity cost of capital used by a business. D) irrelevant for determining economic profit.

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