Short Run Costs
To produce 10 shirts, the total cost is $80; to produce 11 shirts, the total cost is $99. The marginal cost of the 11th shirt is equal to A. $9. B. $19. C. $8. D. $99. E. $80.
$19
The table above gives costs at Jan's Bike Shop. Unfortunately, Jan's record keeping has been spotty. Each worker is paid $100 a day. Labor costs are the only variable costs of production. What is the total cost of producing 50 bikes? A. $100 B. $500 C. $400 D. $200 E. $300
$400
Average total cost is equal to A. total cost ÷ quantity. B. average fixed cost + average variable cost. C. the change in total cost when output changes by one unit. D. Answers A and B are correct. E. Answers A and C are correct.
Answers A and B are correct
Which of the following always decreases when output increases? A. total cost B. marginal cost C. average variable cost D. average fixed cost E. total fixed cost
average fixed cost
When marginal cost is positive, total cost is ________ as output increases. A. constant B. decreasing C. negative D. undefined E. increasing
increasing
The total variable cost curve ________ because ________ as output increases. A. slopes downward; variable cost increases B. slopes upward; variable cost increases C. slopes downward; marginal cost increases D. slopes upward; marginal cost increases E. is horizontal; fixed cost does not change
slopes upward; variable cost increases
Marginal cost is equal to A. the change in fixed cost that results from a one-unit increase in output. B. the total cost of a firm's production. C. total cost minus fixed cost. D. the change in total cost that results from a one-unit increase in output. E. a cost that is not related to the quantity produced.
the change in total cost that results from a one-unit increase in output
Total cost includes A. the cost of variable resources only. B. the cost of fixed resources only. C. all explicit costs and all the implicit costs that actually must be paid using money. D. the cost of neither variable nor fixed resources. E. the cost of both variable and fixed resources.
the cost of both variable and fixed resources
An increase in the price of labor (a variable resource) shifts A. all cost curves upward. B. none of the cost curves. C. the fixed cost curves upward but leaves the variable cost curves unchanged. D. the variable cost curves upward but leaves the fixed cost curves unchanged. E. the marginal cost curve rightward.
the variable cost curves upward but leaves the fixed cost curves unchanged
Total cost is equal to the sum of A. total revenue and total cost. B. total variable cost and total fixed cost. C. total fixed cost and total product. D. total variable cost and total product. E. the marginal cost plus the total fixed cost plus the total variable cost.
total variable cost and total fixed cost
Chuck owns a factory that produces leather footballs. His total fixed cost equaled $86,000 last year. His total cost equaled $286,000 last year. Hence Chuck's A. incurred an economic loss. B. total variable cost equaled $200,000. C. total variable cost was zero. D. total variable cost equaled $372,000. E. None of the above answers is correct.
total variable cost equaled $200,000
In the above figure, curve A is the ________ curve and curve B is the ________ curve. A. total fixed cost; total variable cost B. total variable cost; total fixed cost C. total cost; total fixed cost D. total variable cost; total cost E. total cost; total variable cost
total cost; total variable cost
Because the amount of labor a firm employs can be changed, the cost of labor is known as A. maximum cost. B. variable cost. C. minimum cost. D. fixed cost. E. an unavoidable cost.
variable cost