1. If an airport decides to expand by building an additional passenger terminal, and in doing so it lowers its average cost per airplane landing, it was previously operating at

a. minimum efficient scale.

b. less than minimum efficient scale.

c. minimum capacity.

d. more than minimum efficient scale.

2. Which of the following statements best describes the economic long run?

a. It is a period during which firms are free to vary all of their inputs.

b. It is any run longer than 3 miles

c. It is a period of six months or more

d. It is a period during which at least one of the firm's inputs is fixed.

3. Which of the following are true about marginal cost?

Marginal cost is determined by the marginal product.

Marginal cost = average total cost at the minimum of ATC

Marginal cost = average variable cost at the minimum of AVC

All of the above

4.

Figure 11-2 Cost ($) C D Quantity of Output