Production and Costs

If total costs rise from $300 to $700 when one additional unit of output is produced, what is marginal cost?

$400

The marginal cost curve's shape is a consequence of the law of _____ returns.

Diminishing

Total variable cost reflects the law of _____ _____ as more and more variable resources are added.

Diminishing returns

The difficulty executives face in efficiently controlling and coordinating a firm's operations as it becomes a large-scale producer is the primary reason for _____ of scale.

Diseconomies

True or false: Fixed costs are a necessary feature of a firm, simply by its existence, but they do not need to be paid and accounted for when output is zero.

False

What is the total cost if total fixed cost is $50 and total variable cost is $75 when output is 10?

$125

What is average fixed cost if average total cost is $100 and average variable cost is $75?

$25

In time, the _____ of a firm's plant size and output may lead to higher average total costs and diseconomies of scale.

Growth

Costs exist because resources:

Have alternative resources/Are productive/Are scarce

What is an example of fixed costs?

Interest on a firm's debts/rental payments/insurance premiums

An _____ cost is the value or worth the resource would have in its best alternative use.

Opportunity

The paper used for printing textbooks is not available for printing encyclopedias or romance novels. This is an example of a(n)

Opportunity Cost

What explains how the firm could earn less profit by selecting the project that shows the greatest accounting profit?

The firm is not taking economic or opportunity costs into account/The firm is taking only explicit costs into account

_____ cost is the sum of fixed cost and variable cost at each level of output.

Total

What methods can be used to calculate average total cost?

Total fixed cost divided by output (Q) plus total variable cost divided by output (Q)/Average fixed cost plus average variable cost/Total cost divided by output (Q)

What is the definition of average variable cost?

Total variable cost divided by output (Q)

A business manager can alter _____ costs in the short run, but _____ costs are beyond a manager's control, are incurred in the short-run and must be paid regardless of output level.

Variable/Fixed

When is marginal cost at its minimum?

When marginal product is at its maximum

Is the change in total cost and the change in total variable cost associated with each additional unit of output the same because the only difference between total costs and total variable costs is the total fixed cost?

Yes