Most empirical studies show that firm’s cost curves ?

A. Slope up to the right
B. Are u-shaped
C. Slope down to the right
D. Slope down to the right and then level off.

The rate at which a firm can substitute capital for labour and hold output constant is the ?

A. Marginal rate of factor substitution
B. Marginal rate of substitution
C. Law of diminishing marginal returns.
D. Marginal rate of production

The formula for average fixed costs is ?

A. Dq/dtfc
B. Tfc – q
C. Tfc/q
D. Q/tfc

Marginal revenue is ?

A. The additional profit the firms earns when it sells an additional unit of output
B. The difference between total revenue and total cost
C. The ratio of total revenue to quantity.
D. The added revenue that a firm takes in when it increases output by one additional unit.

The short run, as economists use the phrase, in characterized by ?

A. At least one fixed factor of production and firms neither leaving nor entering the industry.
B. No variable inputs – that is, all of the factors of production are fixed
C. All inputs being variable
D. A period where the law of diminishing returns does not hold

Which of the following is a correct statement about the relationship between average product (AP) and marginal product (MP) ?

A. If tp is declining, then ap is negative
B. If ap = mp, then total product is at a maximum.
C. If ap exceeds mp then ap is falling
D. If ap is at a maximum, then mp is also,

Engineers for the All-Terrain Bike Company have determined that a 15% increase in all inputs will cause a 15% increase in output Assuming that input prices remain constant, you correctly deduce that such a change will cause ________ as output increases?

A. Average costs to remain constant
B. Average costs to decrease
C. Average costs to increase
D. Marginal costs to increase

_________ is said to exist when the formation of a regional trading group leads to an expansion of trade above pregroup levels ?

A. Trade creation
B. Trade diversion
C. Trade exclusion
D. Trade distortion

A positive, dynamic effect of economic integration is illustrated by ?

A. Trade diversion effect
B. Increased monopoly power of firms
C. Decrease customs costs
D. Economy-of-scale effect

Trade creation will more likely outweigh trade diversion for Country X that forms a customs union if the level of tariffs in Country X prior to the customs union is ________ and the total number of countries forming the customs union is _________?

A. Relatively high; relatively large
B. Relatively high; relatively small
C. Relatively low ; relatively large
D. Relatively low ; relatively small