ting profit is zero. B. Economic profit is positive. C. Accounting profit is positive. D. Total revenue equals explicit and implicit costs. 2. If a 10% increase in inputs results in a 20% increase in output, then the firm is said to exhibit: A. Diseconomies of scale B. Diminishing marginal returns to scale C. Constant returns to scale
1. A firm is said to be earning normal profit whenever:
A. Accounting profit is zero.
B. Economic profit is positive.
C. Accounting profit is positive.
D. Total revenue equals explicit and implicit costs.
2. If a 10% increase in inputs results in a 20% increase in output, then the firm is said to exhibit:
A. Diseconomies of scale
B. Diminishing marginal returns to scale
C. Constant returns to scale
D. Economies of scale
3. Economists have traditionally attempted to avoid the trap of:
A. Thinking in terms of total utility.
B. Computing
C. Making interpersonal utility comparisons.
D. None of the above.
4. According to the water-diamond paradox
A. Water has a lower MU than Diamond.
B. Water has a higher TU than Diamond.
C. Prices reflect MU and not TU
D. All of the above.
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