Unit 3 : Reading Quiz # 9 : 6 points 1. When diseconomies of scale occur: A) the long-run average total cost curve falls. B) marginal cost intersects average total cost. C) the long-run average total cost curve rises. D) average fixed costs will rise. 2. The long-run average total cost curve: A) will rise if diminishing returns are encountered. B) will fall if diminishing returns are encountered. C) will rise if economies of scale are incurred. D) is based on the assumption that all resources are variable.  

3. At long-run equilibrium for the perfectly competitive firm, the marginal cost is equal to all of the following EXCEPT: A) average total cost B) price C) marginal revenue D) average variable cost 4. If a firm/business incurs losses, it should continue to produce as long as the price covers the : A) average variable costs B) average fixed costs C) marginal costs D) marginal revenue

5. Assume profit-maximizing firms in a perfectly/pure competitive industry are in long-run equilibrium. In that condition, all of the following are achieved EXCEPT:: A) firms earn normal profit B) firms have no incentive to enter or exit the industry C) consumer and producer surplus are maximized D) firms/businesses earn an economic profit In economics this term describes the requirement that goods be produced in the least costly way. A) Cost efficiency B) Productive efficiency C) Allocative efficiency D) Decreasing–cost efficiency