Chapter 11 Micro

Divide by _______ and you get the Average

Quantity

Multiply by _____ and drove the A

Quantity

If a firm produces 20 units of output and incurs a TC of $1,000 and a variable cost is $700, calculate the firm's AFC of production if it expands output to 25 units. a) $300 b) $15 c) $12 d) It is impossible to determine without additional info.

a) $300

Which of the following is a factor of production that generally is fixed in the short run? a) raw materials b) labor c) a factory building d) water

a) raw materials

A characteristic of the long run is a) there are fixed inputs. b) all inputs can be varied. c) plant capacity cannot be increased or decreased. e) there are both fixed and variable inputs

b) all inputs can be varied.

Vipsana's Gyros House sells gyros. The cost of ingredients (pita, meat, spices, etc.) to make a gyro is $2.00. Vipsana pays her employees $60 per day. She also incurs a fixed cost of $120 per day. Calculate Vipsana's variable cost per day when she produces 50 gyros using two workers? a) $100 b) $124.40 c) $220 d) $240

c) $220

Which of the following equations is correct? a) AVC - ATC = AFC b) AVC + ATC = AFC c) AFC + AVC = ATC d) ATC + AVC = AFC

c) AFC + AVC = ATC

Vipsana's Gyros House sells gyros. The cost of ingredients (pita, meat, spices, etc.) to make a gyro is $2.00. Vipsana pays her employees $60 per day. She also incurs a fixed cost of $120 per day. Calculate Vipsana's total cost per day when she produces 50 gyros using two workers? a) $100 b) $124.4 c) $220 d) $340

d) $340

If 11 workers can produce a total of 54 units of a product and a 12th worker has a marginal product of 6 units, then the average product of 12 workers is a) 60 units. b) 54 units. c) 48 units. d) 5 units.

d) 5 units.

Which of the following is a fixed cost? a) payment to hire a security worker to guard the gate to the factory around the clock b) wages to hire assembly line workers c) payments to an electric utility d) costs of raw materials

d) costs of raw materials

A long run has no...

fixed costs

The shape of ATC, AVC, and MC

goes down, hits the minimum and goes back up

A long-run average cost curve shows the...

lowest cost at which a firm is able to produce a given quantity of output in the long run, when no inputs are fixed.

ATC on a graph is

Always above

AVC on a graph is

Always below

MC on a graph

Crosses through and touches them

TC= _______ + ________

FC + VC