Chapter 7 Practice Questions
The total cost (TC) of producing computer software diskettes (Q) is given as: TC = 200 + 5Q. What is the average total cost?
(200+5Q)/Q
The total cost (TC) of producing computer software diskettes (Q) is given as: TC = 200 + 5Q. What is the fixed cost?
200
The total cost (TC) of producing computer software diskettes (Q) is given as: TC = 200 + 5Q. What is the average fixed cost?
200/Q
The total cost (TC) of producing computer software diskettes (Q) is given as: TC = 200 + 5Q. What is the average variable cost?
5
The total cost (TC) of producing computer software diskettes (Q) is given as: TC = 200 + 5Q. What is the marginal cost?
5
The total cost (TC) of producing computer software diskettes (Q) is given as: TC = 200 + 5Q. What is the variable cost?
5Q
A fast food restaurant currently pays $5 per hour for servers and $50 per hour to rent ovens and other kitchen machinery. The ratio of marginal products (capital to labor) is 12. Determine whether the restaurant is minimizing its cost of production.
No, the restaurant is not minimizing its cost of production because MPK /MPL ≠ r/w.
A fast food restaurant currently pays $5 per hour for servers and $50 per hour to rent ovens and other kitchen machinery. The ratio of marginal products (capital to labor) is 12. What adjustments are called for to improve the efficiency in resource use?
The firm should use more capital and less labor to make the ratios equal.
Which of the following is the user cost of capital
economic depreciation + (interest rate)(value of capital)
An isocost line reveals the
input combinations that can be purchased for a given total cost.