Which of the following statements identifies the difference between variable costs and fixed costs?
A) Variable costs are the costs incurred on variable factors of production, whereas fixed costs are the costs incurred on all factors of production.
B) Variable costs of a firm are zero after it shut downs, whereas it continues to incur the fixed costs of production in the short run.
C) Variable costs exist even when the production is zero, whereas fixed costs exist only when there is some positive production.
D) Variable costs are incurred only in the long run, whereas a firm incurs some fixed costs in both the short run and the long run.
B
You might also like to view...
Economists believed that the U.S. economy had a (n) ____ in 2006 and 2007
a. mild recession b. small recessionary gap c. small inflationary gap d. deflationary gap
White women earn an average of 25% less than white men. A labor economist who wants to investigate whether the differences in earnings indicate labor-market discrimination against women should consider whether white men and women have similar (i) years of work experience. (ii) educational attainments. (iii) occupations. (iv) child care responsibilities
a. (i) and (ii) only b. (iii) and (iv) only c. (ii) only d. (i), (ii), (iii), and (iv)
Refer to Figure 6.4. Suppose that the current price is set at C and Q1 units of a good are traded. Which of the following statements is incorrect?
A. The quantity supplied is smaller than the quantity demanded. B. A buyer's willingness to pay is greater than a seller's willingness to accept. C. The producer surplus would increase should the price rise. D. Total surplus would increase should the price fall.
A payment for the use of any resource over and above its opportunity cost is called
A) accounting profit. B) economic profit. C) normal cost. D) economic rent.