Short-Run Cost and Output Decisions

Total variable cost​ ________ as output​ increases, and total fixed cost​ ________ as output increases. A. ​increases; does not change B. ​increases; decreases C. ​increases; increases D. does not​ change; does not change

A

Formula for Total Fixed Cost: A: TFC=TC/TVC B: TFC=TC-TVC C: TFC=TC+TVC D: TFC=TVC-TC

B

In the short run when the marginal product of labor​ ________, the marginal cost of an additional unit of output​ ________. A. ​ falls; doesn't change B. ​ rises; falls C. ​ falls; falls D. ​ rises; rises

B

Marginal cost A. is the average cost of production divided by output. B. is the increase in total cost resulting from producing one more unit. C. equals the increase in AVC resulting from producing one more unit. D. always equals average cost.

B

The Lawn​ Ranger, a landscaping​ company, has total costs of​ $4,000 and total variable costs of​ $1,000. The Lawn​ Ranger's total fixed costs are A. ​ $0. B. ​ $3,000. C. ​ $5,000. D. indeterminate because the​ firm's output level is not known.

B

Total cost is calculated as A. the sum of average fixed cost and average variable cost. B. the sum of total fixed cost and total variable cost. C. the sum of all the​ firm's explicit costs. D. the product of average total cost and price.

B

Which type of cost does not depend on a​ firm's output? A. total cost Your answer is not correct.B. marginal cost C. fixed cost D. variable cost

C

Economists usually assume that​ ________ is a fixed input in the​ ________ run. A. ​ labor; short B. ​ capital; long C. ​ labor; long D. ​ capital; short

D

Marginal cost is​ ________ average variable cost when​ ________. A. equal​ to; average total cost is minimized B. less​ than; total cost is maximized C. greater​ than; average fixed cost is minimized D. equal​ to; average variable cost is minimized.

D

Wilbur's Widgets, a widget​ company, produces 100 widgets. Its average fixed cost is​ $5 and its total variable cost is​ $300. What is the total cost of producing 100​ widgets? A. ​ $300 B. ​ $305 C. ​ $500 D. ​ $800

D

Which of the following is most likely to be a variable cost for a​ firm? A. The monthly rent on office space that it leased for a year B. The​ franchiser's fee that a restaurant must pay to the national restaurant chain C. The payroll taxes that are paid on employee wages D. The interest payments made on loans

C

FORMULA FOR AVERAGE FIXED COST A) DELTAq/DELTAtfc B) TFC-q C) q/TFC D) TFC/Q

D

Which type of cost does depend on a​ firm's output? A. variable cost B. marginal cost C. total cost D. all of the above

D