ECON 247 Final | 209 Questions and Detailed Correct
Answers | Graded A+ | 2026/2027 Updated Edition |
Athabasca University
A certain firm manufactures and sells computer chips. Suppose that last year it
sold four million chips at a price of $10 per chip. Which of the following
terminology correctly accounts for the $40 million to this firm?
Select one:
a. Its accounting profit amounted to $40 million.
b. Its explicit costs amounted to $40 million.
c. Its total revenue amounted to $40 million.
d. Its economic profit amounted to $40 million. - ANSWERS c. Its total revenue
amounted to $40 million.
Marginal cost increases as the quantity of output increases. What property does
this reflect?
Select one:
a. increasing marginal product
b. increasing total cost
c. diminishing total cost
d. diminishing marginal product - ANSWERS d. diminishing marginal product
Which of the following explains the relationship among different cost functions?
Select one:
,a. The total variable cost of seven units equals the average variable cost of seven
units divided by seven.
b. The average total cost of seven units equals the average variable cost of the
seven units minus the average fixed cost of seven units.
c. The marginal cost of the fifth unit of output equals the total fixed cost of five
units minus the total fixed cost of four units.
d. The marginal cost of the fifth unit of output equals the total variable cost of five
units minus the total variable cost of four units. - ANSWERS d. The marginal
cost of the fifth unit of output equals the total variable cost of five units minus the
total variable cost of four units.
How is average total cost (ATC) calculated?
Select one:
a. ATC = change in total cost ÷ change in quantity of input
b. ATC = total cost ÷ quantity of output
c. ATC = total fixed cost + total variable cost
d. ATC = change in total cost ÷ change in quantity of output - ANSWERS b. ATC
= total cost ÷ quantity of output
The marginal product of labour can be defined as
Select one:
a. change in quantity of labour divided by change in profit.
b. change in quantity of labour divided by change in quantity of output.
c. change in quantity of output divided by change in quantity of labour.
d. change in profit divided by change in quantity of labour. - ANSWERS c.
change in quantity of output divided by change in quantity of labour.
,Explicit costs
Select one:
a. require an outlay of money by the firm.
b. include all the firm's opportunity costs.
c. include interest earned from abandoned investment opportunities.
d. include income that is forgone by the firm's owners. - ANSWERS a. require
an outlay of money by the firm.
When do diseconomies of scale occur?
Select one:
a. when long-run average total costs rise as output increases
b. when average fixed costs are constant
c. when long-run average total costs fall as output increases
d. when average fixed costs are falling - ANSWERS
Economic profit is equal to
Select one:
a. total revenue minus the explicit cost of producing goods and services.
b. total revenue minus the opportunity cost of producing goods and services.
c. accounting revenue minus the accounting cost of producing goods and services.
d. explicit revenue minus the explicit cost of producing goods and services. -
ANSWERS b. total revenue minus the opportunity cost of producing goods and
services.
What is the relationship between accounting profit and economic profit?
, Select one:
a. economic profit = accounting profit - explicit costs
b. economic profit = accounting profit + explicit costs
c. accounting profit = economic profit + implicit costs
d. accounting profit = economic profit - implicit costs - ANSWERS c. accounting
profit = economic profit + implicit costs
In the long run, what happens to inputs?
Select one:
a. Inputs that were fixed in the short run remain fixed.
b. Inputs that were variable in the short run will increase.
c. Inputs that were fixed in the short run become variable.
d. Inputs that were variable in the short run will decrease. - ANSWERS c.
Inputs that were fixed in the short run become variable.
When marginal cost exceeds average total cost, we know that
Select one:
a. average total cost must be falling.
b. average fixed cost must be rising.
c. marginal cost must be falling.
d. average total cost must be rising. - ANSWERS d. average total cost must be
rising.
What must be happening when marginal cost is greater than average total cost?
Select one:
Answers | Graded A+ | 2026/2027 Updated Edition |
Athabasca University
A certain firm manufactures and sells computer chips. Suppose that last year it
sold four million chips at a price of $10 per chip. Which of the following
terminology correctly accounts for the $40 million to this firm?
Select one:
a. Its accounting profit amounted to $40 million.
b. Its explicit costs amounted to $40 million.
c. Its total revenue amounted to $40 million.
d. Its economic profit amounted to $40 million. - ANSWERS c. Its total revenue
amounted to $40 million.
Marginal cost increases as the quantity of output increases. What property does
this reflect?
Select one:
a. increasing marginal product
b. increasing total cost
c. diminishing total cost
d. diminishing marginal product - ANSWERS d. diminishing marginal product
Which of the following explains the relationship among different cost functions?
Select one:
,a. The total variable cost of seven units equals the average variable cost of seven
units divided by seven.
b. The average total cost of seven units equals the average variable cost of the
seven units minus the average fixed cost of seven units.
c. The marginal cost of the fifth unit of output equals the total fixed cost of five
units minus the total fixed cost of four units.
d. The marginal cost of the fifth unit of output equals the total variable cost of five
units minus the total variable cost of four units. - ANSWERS d. The marginal
cost of the fifth unit of output equals the total variable cost of five units minus the
total variable cost of four units.
How is average total cost (ATC) calculated?
Select one:
a. ATC = change in total cost ÷ change in quantity of input
b. ATC = total cost ÷ quantity of output
c. ATC = total fixed cost + total variable cost
d. ATC = change in total cost ÷ change in quantity of output - ANSWERS b. ATC
= total cost ÷ quantity of output
The marginal product of labour can be defined as
Select one:
a. change in quantity of labour divided by change in profit.
b. change in quantity of labour divided by change in quantity of output.
c. change in quantity of output divided by change in quantity of labour.
d. change in profit divided by change in quantity of labour. - ANSWERS c.
change in quantity of output divided by change in quantity of labour.
,Explicit costs
Select one:
a. require an outlay of money by the firm.
b. include all the firm's opportunity costs.
c. include interest earned from abandoned investment opportunities.
d. include income that is forgone by the firm's owners. - ANSWERS a. require
an outlay of money by the firm.
When do diseconomies of scale occur?
Select one:
a. when long-run average total costs rise as output increases
b. when average fixed costs are constant
c. when long-run average total costs fall as output increases
d. when average fixed costs are falling - ANSWERS
Economic profit is equal to
Select one:
a. total revenue minus the explicit cost of producing goods and services.
b. total revenue minus the opportunity cost of producing goods and services.
c. accounting revenue minus the accounting cost of producing goods and services.
d. explicit revenue minus the explicit cost of producing goods and services. -
ANSWERS b. total revenue minus the opportunity cost of producing goods and
services.
What is the relationship between accounting profit and economic profit?
, Select one:
a. economic profit = accounting profit - explicit costs
b. economic profit = accounting profit + explicit costs
c. accounting profit = economic profit + implicit costs
d. accounting profit = economic profit - implicit costs - ANSWERS c. accounting
profit = economic profit + implicit costs
In the long run, what happens to inputs?
Select one:
a. Inputs that were fixed in the short run remain fixed.
b. Inputs that were variable in the short run will increase.
c. Inputs that were fixed in the short run become variable.
d. Inputs that were variable in the short run will decrease. - ANSWERS c.
Inputs that were fixed in the short run become variable.
When marginal cost exceeds average total cost, we know that
Select one:
a. average total cost must be falling.
b. average fixed cost must be rising.
c. marginal cost must be falling.
d. average total cost must be rising. - ANSWERS d. average total cost must be
rising.
What must be happening when marginal cost is greater than average total cost?
Select one:
