econ202 ch.9
Answer the question on the basis of the accompanying table that shows average total costs (ATC) for a manufacturing firm whose total fixed costs are $10. Output ATC 1 $40 2 27 3 29 4 31 5 38 The total cost of producing 4 units of output is
$124
Refer to the diagram. This firm's average fixed costs
are the vertical distance between AVC and ATC.
Marginal cost can be defined as the
change in total cost resulting from one more unit of production.
Variable costs are
costs that change with the level of production.
Which of the following is most likely to be an implicit cost for Company X?
forgone rent from the building owned and used by Company X
In comparing the changes in TVC and TC associated with an additional unit of output, we find that
the changes in TC and TVC are equal
Which of the following is most likely to be a fixed cost?
property insurance premiums
Fixed costs are associated with
the short run only
Ouput Total Cost 0 $10 1 20 2 28 3 38 4 53 5 73 6 98 Refer to the provided table. The marginal cost of producing the sixth unit of output is
$25
Input(workers) Output TFC ($) TVC ($) Total Cost ($) 0 0 50 0 1 8 50 40 90 2 20 50 80 3 28 50 120 170 4 35 50 210 5 41 50 200 250 Refer to the provided table. The average variable cost of producing 35 units of output is
$4.57
Output Average Fixed Cost Average Variable Cost 1 $50.00 $100.00 2 25.00 80.00 3 16.67 66.67 4 12.50 65.00 5 10.00 68.00 6 8.37 73.33 7 7.14 80.00 8 6.25 87.50 Total fixed cost is
$50.00
Answer the question on the basis of the following cost data. Output Total Cost 0 $24 1 33 2 41 3 48 4 54 5 61 6 69 The average fixed cost of producing 3 units of output is
$8
Answer the question on the basis of the following output data for a firm. Assume that the amounts of all non labor resources are fixed. Number of Workers Units of Output 0 0 1 40 2 90 3 126 4 150 5 165 6 180 The marginal product of the sixth worker is
15 units of output.
Other things equal, if the fixed costs of a firm were to increase by $100,000 per year, which of the following would happen?
Average fixed costs and average total costs would rise
curves 1, 2, 3, and 4 represent the
MC, ATC, AVC, and AFC curves, respectively.
Which of the following relates to cost curves?
Marginal cost intersects average total cost at the latter's minimum point.
the range of diminishing marginal returns is
Q1Q3.
Answer the question on the basis of the following information. TFC = Total Fixed Cost Q = Quantity of Output MC = Marginal Cost P = Product Price TVC = Total Variable Cost Average total cost is _______.
TFC+TVC/Q
Which of the following statements is false?
The short run refers to a period of less than one year.
Refer to the diagram. Economies of scale
develop over the 0Q1 range of output.
Economic profits are
equal to the difference between accounting profits and implicit costs.
The main difference between the short run and the long run is that
in the short run, some inputs are fixed and some are variable.
If a firm decides to produce no output in the short run, its costs will be
its fixed cost
The vertical distance between ATC and AVC reflects
the average fixed cost at each level of output
Answer the question on the basis of the following output data for a firm. Assume that the amounts of all nonlabor resources are fixed. Number of Workers Units of Output 0 0 1 40 2 90 3 126 4 150 5 165 6 180 Diminishing marginal returns become evident with the addition of the
third worker.
The law of diminishing returns explains why
total cost eventually rises faster and faster.
total product will be at a maximum at
total product will be at a maximum at
Chris is preparing for a comprehensive course exam by reading a textbook with chapters of equal length and difficulty. The number of chapters she can comprehend and master when studying is: (1) hour one, 1.5 chapters; (2) hour two, 2.0 chapters; (3) hour three, 1.5 chapters; (4) hour four, 1 chapter; (5) hour five, 0 chapters. Diminishing marginal returns to studying sets in for Chris after hour
two