Figure 5.4 -One Can Tell That Figure 5.4 Shows Short Run Costs

question 207

Multiple Choice

Figure 5.4
-One can tell that Figure 5.4 shows short run costs because

• A) the slope of total costs and variable costs are the same.
• B) costs are rising.
• C) total costs are positive when output is zero implying fixed costs.
• D) all of the above.

---

Definitions:

Long Run

A period in which all factors of production and costs are variable, allowing firms to adjust all inputs.

Substitute Resources

Alternative resources or inputs that can be used in production to replace other resources, helping to maintain production when some resources are scarce.

Natural Resource

Materials or substances such as minerals, forests, water, and fertile land that occur in nature and can be used for economic gain.

Consumer Income

The total earnings or financial inflow that an individual receives from various sources, including wages, investments, and benefits, which determines their purchasing power.