Fill-in-the-Blank
1. Fill in the blank to make the following statements correct.
a. The technological relationship between the inputs of
factor services and output is called the.
b.
c. Implicit costs that must be considered when calculating a
firm’s economic profit include the opportunity cost of the
owner’s and the opportunity cost of the owner’s
d. A firm earning positive accounting profits could have
zero if the owner’s capital is earning exactly its
opportunity cost.
e. A firm’s planning decisions made when some inputs are
variable but others are fixed are made in the time period
known as the. The time period over which all factors
are variable but technology is fixed is known as the
2. Fill in the blanks to make the following statements correct.
a. As more of a variable factor is used in combination with
given quantities of fixed factors, the marginal product of
the variable factor will eventually decrease. This
hypothesis is known as the law of.
b. The change in total output resulting from the use of one
additional unit of the variable factor is called the
c. If average product and marginal product curves are
plotted on a graph, the AP curve is rising as long as theEconomic profit=Revenues−(Explicit costs+_____