IDENTIFICATION

____________________1. The additional cost from an additional unit of output produced.

____________________2. It shows the relationship between the level of inputs and output.

____________________3. The difference between ATC and AVC in the short-run period.

____________________4. Cost that exists only in the very short run or immediate period.

____________________5. Cost that decreases with the increases in the output produced.

____________________6. A monetary expenditure made to outsiders who supply the inputs.

____________________7. Inputs that do not vary with the level of output.

____________________8. Variable cost per unit of output.

____________________9. It states that as you combine the fixed inputs to the variable inputs, total product increases at an increasing rate continuously increase at a decreasing rate and at a certain point it declines.

____________________10. Cost of self-owned or self-employed resources.

____________________11. The total output produced per unit of a resourced employed.

____________________12. Production period where all factors of production used are variable inputs.

____________________13. The rational stage of production.

____________________14. A production stage where the firm is over utilizing its fixed input.

____________________15. It is J shaped curve.

TRUE OR FALSE

______1. Land and managerial talent are fixed inputs in the short-run.

______2. Rent, depreciation and salary of the managers are variable costs in the short-run.

______3. Implicit cost of a resource is counted as economic cost due to the opportunity cost of the said resource.

______4. When TP is maximum, MP is negative.

______5. In the short-run period, TC=TFC at zero output.

______6. In the long-run, ATC = AVC.

______7. From the economist's point of view, the real importance of cost lies in the fact they represent constraints to production.

______8. For the firm to reduce its fixed cost, it has to produce more output.

______9. Normal profit is part of the firm's implicit cost.

______10. In the short-run, the firm's plant capacity or size of the plant is fixed.