All the decisions made by a firm have one overriding objective, which is to _________________.

maximize its total revenue
maximize the quantity that it sells
maximize profit
maximize its market share

Average product is the output produced per unit of ____________ , and marginal product is the output that a one-unit increase in ___________ can produce.

fixed input; all inputs
variable input; the fixed input
variable input; the variable input
all inputs; all inputs

The law of diminishing marginal returns says that as the firm uses more of ____________ , with a given quantity of ________, _______ product eventually decreases.

a fixed input; variable inputs; marginal
a variable input; fixed inputs; average
a variable input; fixed inputs; marginal
all inputs; capital; average

As more and more of the ___________ input is used, the total product curve increases quickly at first because _________product increases and then more slowly because _________.

fixed; average; average product decreases
variable; average; average product reaches a maximum
variable; marginal; marginal product diminishes
fixed; marginal; marginal product reaches a maximum

Which of the following statements is not true?

As output increases, total cost and total variable cost increase together.
Total cost minus total fixed cost equals total variable cost.
As output increases, total cost and total fixed cost increase together.
Total fixed cost plus total variable cost equals total cost.

Marginal cost is the increase in total__________ that results from a one-unit increase in ____________.

fixed cost; the fixed input
variable cost; the variable input
cost; output
fixed cost; output

Which of the following statements is true?

Average fixed cost equals total fixed cost per unit of output.
Average variable cost equals total variable cost per unit of variable input.
Average total cost equals average fixed cost minus average variable cost.
Average fixed cost equals total fixed cost per unit of fixed input.

Which of the following statements is not true?

In the long run, the average cost curve is downward sloping.
In the long run, the quantities of all inputs can be varied.
The firm's long run cost is the cost when it uses the economically efficient quantity of inputs.
In the long run, all costs are variable costs.

In the long run, the average cost curve ________________________________.

is made up of the lowest parts of the short-run average total cost curves
is the same as the short-run average total cost curves
is horizontal
lies below the short-run average total cost curves

With given input prices, constant returns to scale are present when the percentage increase in output _____________________________.

equals the percentage increase in all inputs
equals the percentage increase in all fixed inputs
is positive
is zero

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