7.3 Costs in the Short Run

The sum of the fixed plus variable costs is known as _________.

total cost Total cost includes all costs used for production, both fixed and variable costs.

_________ are what the firm pays for the use of the factors of production.

Factor payments

The table below represents the costs of producing sneakers. Find the average fixed cost for producing 26 sneakers. Round your answer to the nearest hundredth

To find the average fixed cost, divide the fixed cost by the quantity produced. $11826=$4.54.

The table below represents the costs of producing sneakers. Find the average variable cost for producing 18 sneakers. Round your answer to the nearest hundredth.

To find the average variable cost, divide the variable cost by the quantity produced. $5018=$2.78.

Which of the following is not an equation used to find average profit?

average profit=revenue−cost

Profit margin is synonymous with the term _______ and tells whether or not total profit will be positive.

average profit Average profit and profit margin are synonymous. They are equal to price - average cost.

The graph below represents production costs at the button factory. The curve labeled 'C' represents what kind of curve?

marginal cost Information on total costs, fixed cost, and variable cost can be presented on a per-unit basis. The average total cost (ATC) is calculated by dividing total cost by the total quantity produced. The average total cost curve is typically U-shaped. The average variable cost (AVC) is calculated by dividing variable cost by the quantity produced. The average variable cost curve lies below the average total cost curve and is also typically U-shaped. The marginal cost (MC) is calculated by taking the change in total cost between two levels of output and dividing by the change in output. The marginal cost curve is upward-sloping.

The following chart represents the cost of producing different amounts of pizza pies in an hour. Quantity of Output12457 Workers (L) 2.253.004.105.506.75Wage Rate per hour$35.00$35.00 $35.00 $35.00$35.00 Calculate the cost of producing 4 pizza pies. Round your answer to the nearest hundredths place.

143.5

The following chart represents the cost of producing varying amounts of tacos in an hour. Quantity of Output (Q)1015202530 Workers (L) 1.252.43.356.7Wage Rate per hour$7.50$7.50$7.50$7.50$7.50 Calculate the cost of producing 10 tacos. Round your answer to the nearest hundredths place.

9.38

All of the following are examples of fixed costs, except:

labor