In the long run, all inputs are variable.

In the long run, all inputs are variable.
 a. True
  b. False

QUESTION 2

In the short run, all costs are fixed.
 a. True
  b. False

QUESTION 3

In the long run, all of a firm's inputs are variable.
 a. True
  b. False

QUESTION 4

The graph of average fixed cost is a horizontal line.
 a. True
  b. False

QUESTION 5

A young chef is considering opening his own sushi bar. To do so, he would have to quit his current job, which pays 20,000 a year, and take over a store building he owns and currently rents for 6,000 a year. His expenses at the sushi bar would be 50,000 for food and 2,000 for gas and electricity. What is the minimum revenue he must earn per year in order for it to be worth his while to open his sushi bar?
 a. 26,000
  b. 66,000
  c. 78,000
  d. 52,000
  e. 72,000

QUESTION 6

Suppose that at the current level of output, Pat's Hats has fixed costs of 500, variable costs of 1,000 . and 2,000 in total revenue. Which of the following is true?
 a. Profit is currently 500 and, in the long run, it will be 1,000 because there will be no fixed costs.
  b. Profit is currently 500 and, in the long run, it will be 1,500 because there will be no variable costs.
  c. Profit is currently 500.
  d. Profit is currently 500, and Pat's Hats will want to decrease its plant size in the long run to lower its fixed costs.
  e. Pat's Hats will continue to operate as long as revenue is greater than 500.

QUESTION 7

Suppose I have 1,000 to put into a one-year CD. Community Bank offers 5 percent interest, Floatbank offers 5.25 percent, and Squidbank offers 5.40 percent. If I place my money in Squidbank, my economic profit on the investment is
 a. 5.40 percent
  b. 5 percent
  c. 0.40 percent
  d. 0.15 percent
  e. -0.40 percent