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1/In the short run, at least one input is variable and one input is fixed. A/Tru

ID: 1236376 • Letter: 1

Question

1/In the short run, at least one input is variable and one input is fixed.
A/True
B/False

2/If marginal product is less than average product, average product must be falling.
A/True
B/False

3/The costs incurred by a firm in its use of variable factors of production are:
A/total costs.
B/marginal costs.
C/variable costs.
D/fixed costs.

4/Given constant quantities of all other factors, when additional units of a variable factor of production reduce total output, the firm is experiencing:
A/constant marginal returns.
B/increasing marginal returns.
C/diminishing marginal returns.
D/negative marginal returns.

5/"Diminishing marginal returns" means that:
A/each additional unit of an input used will decrease output.
B/each additional unit of an input used will increase output, but by smaller and smaller amounts.
C/each additional unit of an input used will increase output by larger and larger amounts.D/
the firm is maximizing profit.

Explanation / Answer

1/In the short run, at least one input is variable and one input is fixed.
A/True
B/False

2/If marginal product is less than average product, average product must be falling.
A/True
B/False

3/The costs incurred by a firm in its use of variable factors of production are:
A/total costs.
B/marginal costs.
C/variable costs.
D/fixed costs.

4/Given constant quantities of all other factors, when additional units of a variable factor of production reduce total output, the firm is experiencing:
A/constant marginal returns.
B/increasing marginal returns.
C/diminishing marginal returns.
D/negative marginal returns.

5/"Diminishing marginal returns" means that:
A/each additional unit of an input used will decrease output.
B/each additional unit of an input used will increase output, but by smaller and smaller amounts.
C/each additional unit of an input used will increase output by larger and larger amounts.D/
the firm is maximizing profit.