When marginal costs are below average total costs ?

If as the quantity produced increase a production function first exhibits increasing marginal product and later diminishing marginal product, the corresponding marginal-cost curve will ?

A. be flat (horizontal)

B. slope upward

C. slope downward

D. be U-shaped.

Which of the following statements is true ?

A. All costs are fixed in the short run.

B. All costs are variable in the long run

C. All costs are variable in the short run

D. All costs are fixed in the long run

If a production function exhibits diminishing marginal product. its slope ?

A. is linear (a straight line)

B. becomes steeper as the quantity of the input increase

C. could be any of these answers

D. becomes flatter as the quantity of the input increase

Naila owns a small pottery factory. She can make 1000 pieces of pottery per year and sell them for Rs 100 each. It costs Naila Rs 20,000 for the raw materials to produce the 1,000 pieces of pottery She has invested Rs100,000 in her factory and equipment: Rs50,000 from her savings and Rs50,000 borrowed at 10 per cent. (Assume that she could have loaned her money out at 10 her per cent, too) Naila can work at a competing pottery factory for Rs40,000 per year. The economics profit at Naila’s pottery factory is ?

A. Rs80,000

B. Rs30,000

C. Rs75,000

D. Rs70,000

Economic profit is equal to total revenue minus ?

A. variable costs

B. implicit costs

C. explicit costs

D. marginal costs