If the Total Output of the fiRm Is Increasing in the Short

question 7

Multiple Choice

If the total output of the firm is increasing in the short run, this means that _____.

• A) the marginal product of the variable inputs is positive
• B) the marginal cost of the variable inputs is zero
• C) the fixed cost of production is equal to zero
• D) the total revenue earned by the firm is falling

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Definitions:

Scarce Resource

An economic term referring to a resource that has limited availability in relation to its demand, leading to allocation decisions.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision.

Alternative Choices

Different options or courses of action that can be taken in a decision-making process.

Sunk Cost

A cost that has already been incurred and cannot be recovered, regardless of future events.