Microeconomics Test 3 Grodner T/F
Average total cost reveals how much total cost will change as the firm alters its level of production
F
Diminishing marginal product exists when the total cost curve becomes flatter as outputs increase.
F
Economists normally assume that people start their own businesses to help society maximize its income
F
Fixed costs are those costs that remain fixed no matter how long the time horizon is.
F
If the marginal cost curve is rising, so is the average total cost curve
F
The average total cost curve is unaffected by diminishing marginal product.
F
The shape of the total cost curve is unrelated to the shape of the production function.
F
When economists speak of a firm's costs, they are usually excluding the opportunity costs
F
Accountants often ignore implicit costs
T
As a firm moves along its long-run average cost curve, it is adjusting the size of its factory to the quantity of production.
T
Assume Jack received all A's in his classes last semester. If Jack gets all C's in his classes this semester, his GPA may or may not fall.
T
Average total cost and marginal cost are merely ways to express information that is already contained in a firm's total cost.
T
When trying to understand the decision making process of different firms, economists assume that people think at the margin.
T
Average variable cost is equal to total variable cost divided by quantity of output.
T
Because of the greater flexibility that firms have in the long run, all short-run cost curves lie on or above the long-run curve
T
Fixed costs are incurred even when a firm does not produce anything.
T
Implicit costs are costs that do not require an outlay of money by the firm.
T
The cost of producing an additional unit of a good is not the same as the average cost of the good
T
The marginal cost curve intersects the average total cost curve at the minimum point of the average total cost curve.
T
The shape of the marginal cost curve tells a producer something about the marginal product of her workers
T
Variable costs usually change as the firm alters the quantity of output produced.
T
When average total cost rises if a producer either increases or decreases production, then the firm is said to be operating at efficient scale.
T
