The Following Figure Shows the Cost and Revenue Structures of a Firm

question 35

Multiple Choice

The following figure shows the cost and revenue structures of a firm. MC represents the marginal cost curve, AC represents the average cost curve, AR represents the average revenue curve, and MR represents the marginal revenue curve. P* is the equilibrium price and Q* is the equilibrium output.Figure 9.5

-The opportunity cost of capital is:

• A)the cost of labor inputs required to operate that capital.
• B)the cost of raw materials necessary to put that capital to work.
• C)the payment necessary to keep that capital from moving to an alternative use.
• D)the costs of maintenance necessary to keep that capital operating.
• E)the cost of hiring more units of capital to generate additional units of output.

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Definitions:

Executive Agencies

Bodies of the government responsible for the oversight and administration of specific functions, operating under the executive branch.

Fixed Terms

A defined period for a contract or agreement, specifying the start and end dates, after which the contract may need to be renewed or will automatically terminate.

Constitutional Checks and Balances

A system in which different branches of government have powers that can prevent the other branches from gaining too much power, maintaining balance.

Rule-Making Process

The Rule-Making Process involves the procedures and steps that federal or state agencies follow to formulate, amend, or repeal regulations.