Answer the following statements true (T) or false (F)

1. The break-even point on a break-even chart is equivalent to the point where MR = MC on a cost/output graph.
2. It may be beneficial for a firm that is suffering a loss to continue to operate in the short run as long as it is recovering its fixed cost.
3. Any revenue over and above total cost is labeled economic profit.
4. Wages paid are an example of an explicit cost of doing business.
5. Marginal cost is equal to the increase in total cost per unit of input divided by marginal product.
6. Under perfectly competitive conditions, marginal revenue is equal to the price at which a good is sold.
7. Average total cost is equal to total cost divided by marginal product.
8. Normal profit is considered an opportunity cost of operating a business.


1. FALSE
2. FALSE
3. TRUE
4. TRUE
5. TRUE
6. TRUE
7. FALSE
8. TRUE

Economics

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