A firm will shut down in the long run if its earning is
Less than normal profit
Greater than normal profit
Equal to super normal profit
Less than super normal profit
Correct answer is A
The long run is a phase where all factors of production are variable and firms are able to adjust all costs. If its earnings are less than the normal profits, it will shut down. A firm should earn enough to cover its total cost per unit in order to remain in business.
The resources used in production are called
Variable inputs
Factors of production
Capital for production
Fixed inputs
Correct answer is B
Factors of production are the inputs needed for the creation of a good or service. They include land, labor, entrepreneurship, and capital.
Which of the following does not change in the short run?
Variable cost
Marginal cost
Total cost
Fixed cost
Correct answer is D
The short run is a production phase where at least one factor of production is fixed.
Fixed costs are expenditures that do not change based on the level of production, at least not in the short run. Whether you produce a lot or a little, the fixed costs are the same.
The type of production that involve the tapping and harnessing of natural resources is
Primary production
Secondary production
Tertiary production
Industrial production
Correct answer is A
Primary production: this involves acquiring raw materials from its natural source and habitat. It involves converting raw materials into components, for example, making plastics from oil. It also involves assembling the product, eg building houses, bridges and roads.
Which of the following is not true about land?
The supply is fixed
Land is mobile
It is subject to diminishing returns
Land is heterogeneous
Correct answer is B
Land is not mobile because it can not be moved from one place to another, rather land is fixed.