1. Which of the following is always true?

When marginal costs are less than average total costs, average total costs will be decreasing.

When average fixed costs are falling, marginal cots must be less than average fixed costs

When average fixed costs are rising, marginal costs must be greater than average total costs

When marginal costs are greater than average total costs, average total cost will be decreasing

2.In order for the law of diminishing returns to be present, we must have?

At least one factor of production to be fixed

Output decreasing as more laborers are hired

The rice of labor increasing as more workers are hired

Simultaneous changes in labor and capital

Double the output when also input is doubled

3.Which of the following provides the best explanation for diseconomies of scale?

The firm is too small to take advantage f specialization

Large management structures may be bureaucratic and inefficient

If there are too many employees, the work place becomes crowded and people become less productive

Average fixed costs are rising

4. The law of diminishing marginal returns explains the general shape of the firms?

Long run costs

Short run costs

Both

Nothing to do with costs

5. Long-run discectomies of scale over the range of output for which the long-run average cost curve is?

Rises

remains constant

Falls

Does not exist

6. Which of the following is true?

Economic profits are generally lower than accounting profits

They are higher than accounting profits

They are equal

Them together must equal 0