Self-Check Questions

Once you complete the videos, you should be well-prepared to answer the following review questions.

You have just completed a challenging section packed with new concepts. With the relevant information in your hands, you should be able to answer the question posed at the beginning: how many units of pizza to prepare daily if you can only change the number of workers you hire?

  1. What are explicit and implicit costs?

  2. Would you consider an interest payment on a loan to a firm an explicit or implicit cost?

  3. What is the difference between accounting and economic profit?

  4. What is a production function?

  5. What is the difference between a fixed input and a variable input?

  6. How do we calculate marginal product?

  7. What shapes would you generally expect a total product curve and a marginal product curve to have?

  8. What are the factor payments for land, labor, and capital?

  9. What is the difference between fixed costs and variable costs?

  10. How do we calculate each of the following: marginal cost, average total cost, and average variable cost?

  11. What shapes would you generally expect each of the following cost curves to have: fixed costs, variable costs, marginal costs, average total costs, and average variable costs?

  12. Are there fixed costs in the long run? Explain briefly.

  13. Are fixed costs also sunk costs? Explain.

  14. What are diminishing marginal returns as they relate to costs?

  15. Which costs are measured on a per-unit basis: fixed costs, average cost, average variable cost, variable costs, and marginal cost?

Source: OpenStax, https://openstax.org/books/principles-microeconomics-3e/pages/7-review-questions
Creative Commons License This work is licensed under a Creative Commons Attribution 4.0 License.

Last modified: Thursday, November 16, 2023, 4:02 PM