Microeconomics Exam 3
An example of a fixed cost would be: 1. raw materials supplied at a government -regulated price. 2. rent paid on a factory. 3. machine maintenance.
1 and 2 are true
Economic profit is equal to: 1. total revenue - (explicit costs + implicit costs). 2. total revenue - opportunity costs. 3. accounting profit + implicit costs
1. and 2. are true
Economists normally assume that the goal of a firm is to... 1. make profit as large as possible even if it means reducing output. 2. make profit as large as possible even if it means incurring a higher total cost. 3. make revenue as large as possible.
1. make profit as large as possible even if it means reducing output and 2. make profit as possible even if it means incurring a higher total cost. is true
Accounting profit is equal to... 1. total revenue - implicit costs. 2. total revenue - opportunity costs. 3. economic profit + implicit costs.
3. Economic profit + implicit costs
Economists normally assume that the goal of a firm is to 1. sell as much of their product as possible. 2. set the price of their product as high as possible. 3. maximize profit Economists normally assume that the goal of a firm is to (i) sell as much of their product as possible. (ii) set the price of their product as high as possible. (iii) maximize profit. a. (i) and (ii) b. (ii) and (iii) c. (iii) only
3. c. maximize profit
This particular firm is necessarily experiencing diminishing marginal product when (i) A is rising. (ii) B is rising. (iii) C is rising This particular firm is necessarily experiencing diminishing marginal product when curve (i) A is rising. (ii) B is rising. (iii) C is rising. a. (i) only b. (iii) only c. (i) and (ii) d. All of the above are correct.
All are correct.; D. All of the above
. (A) is most likely to represent average total cost.
False
Marginal cost must rise as the quantity of output increases.
False
Variable cost divided by quantity produced is......average total cost. Variable cost divided by quantity produced is a. average total cost. b. marginal cost. c. profit. d. None of the above are correct
False; D. None of the above are correct
The average variable cost of producing four widgets is $2.00. The average variable cost of producing four widgets is a. $2.00 b. $2.50 c. $3.33 d. $5.00
False; $2.50
. The marginal cost of producing the sixth widget is $1.00. The marginal cost of producing the sixth widget is a. $1.00. b. $3.50. c. $5.00. d. $6.00.
False; $6.00
ATC (A) represents the longrun average total cost. Which curve represents the long-run average total cost? a. ATCA b. ATCB c. ATCC d. ATCD
False; ATC (D)
Profit is defined as net revenue minus depreciation Profit is defined as a. net revenue minus depreciation. b. total revenue minus total cost. c. average revenue minus average total cost. d. marginal revenue minus marginal cost
False; B total revenue minus total cost
The average fixed cost of producing five widgets is $1.00. The average fixed cost of producing five widgets is a. $1.00. b. $2.00. c. $3.00. d. None of the above are correct
False; B. $2.00
The marginal product of labor can be defined as change in profit/change in labor. The marginal product of labor can be defined as a. change in profit/change in labor. b. change in output/change in labor. c. change in labor/change in output. d. change in labor/change in total cost
False; B. change in output/ change in labor.
If marginal cost is below average total cost, then average total cost is constant. If marginal cost is below average total cost, then average total cost a. is constant. b. is falling. c. is rising. d. may rise or fall depending on the size of fixed costs
False; B. is falling.
Economies of scale occur when long-run average total costs rise as output increases. Economies of scale occur when a. long-run average total costs rise as output increases. b. long-run average total costs fall as output increases. c. average fixed costs are falling. d. average fixed costs are constant.
False; B. long-run average total costs fall as output increases.
Diminishing marginal product suggests that additional units of output become less costly as more output is produced. Diminishing marginal product suggests that a. additional units of output become less costly as more output is produced. b. marginal cost is upward sloping. c. the firm is at full capacity. d. All of the above are correct
False; B. marginal cost is upward sloping.
The cost of accounting services would be regarded as an implicit cost. Which of the following costs would be regarded as an implicit cost? a. the cost of accounting services b. the opportunity cost of financial capital that has been invested in the business c. the cost of compliance with government regulation d. all costs that involve outlays of money by the firm
False; B. the opportunity cost of financial capital that has been invested in the business would be considered as an implicit cost
Accounting profit is equal to marginal revenue minus marginal cost. Accounting profit is equal to a. marginal revenue minus marginal cost. b. total revenue minus the explicit cost of producing goods and services. c. total revenue minus the opportunity cost of producing goods and services. d. average revenue minus the average cost of producing the last unit of a good or service
False; B. total revenue minus the explicit cost of producing goods and services
Economic profit is equal to total revenue minus the explicit cost of producing goods and services. Economic profit is equal to a. total revenue minus the explicit cost of producing goods and services. b. total revenue minus the opportunity cost of producing goods and services. c. total revenue minus the accounting cost of producing goods and services. d. average revenue minus the average cost of producing the last unit of a good or service
False; B. total revenue minus the opportunity cost of producing goods and services
Which of the curves is most likely to represent average variable cost? a. A b. B c. C d. D
False; C
Average fixed costs do not vary with the amount of output a firm produces. Which of the following costs do not vary with the amount of output a firm produces? a. average fixed costs b. fixed costs and average fixed costs c. marginal costs and average fixed costs d. fixed costs
False; D. Fixed costs do not vary with the amount of output a firm produces.
Net profit can be added to profit to obtain total revenue. Which of the following can be added to profit to obtain total revenue? a. net profit b. capital profit c. operational profit d. total cost
False; D. Total cost
87. Average total cost will be always rising. Average total cost will be a. always rising. b. always falling. c. constant. d. U-shaped
False; D. U-shaped
Fixed costs can be defined as costs that vary inversely with production. Fixed costs can be defined as costs that a. vary inversely with production. b. vary in proportion with production. c. are incurred only when production is large enough. d. are incurred even if nothing is produced
False; D. are incurred even if nothing is produced.
Marginal cost is equal to average total cost when average variable cost is falling. Marginal cost is equal to average total cost when a. average variable cost is falling. b. average fixed cost is rising. c. marginal cost is at its minimum. d. average total cost is at its minimum
False; D. average total cost is at its minimum.
When marginal cost is rising, average variable cost must be rising When marginal cost is rising, average variable cost a. must be rising. b. must be falling. c. must be constant. d. could be rising or falling.
False; D. could be rising or falling.
The marginal product of labor is equal to the incremental cost associated with a one unit increase in labor. The marginal product of labor is equal to the a. incremental cost associated with a one unit increase in labor. b. incremental profit associated with a one unit increase in labor. c. increase in labor necessary to generate a one unit increase in output. d. increase in output obtained from a one unit increase in labor.
False; D. increase in output obtained from a one unit increase in labor
When a factory is operating in the short run, it cannot alter variable costs. When a factory is operating in the short run, a. it cannot alter variable costs. b. total cost and variable cost are usually the same. c. average fixed cost rises as output increases. d. it cannot adjust the quantity of fixed inputs.
False; D. it cannot adjust the quantity of fixed inputs.
Average total cost is increasing whenever total cost is increasing. Average total cost is increasing whenever a. total cost is increasing. b. marginal cost is increasing. c. marginal cost is less than average total cost. d. marginal cost is greater than average total cost
False; D. marginal cost is greater than average total cost.
Harry's Hotdogs is a small street vendor business owned by Harry Huggins. Harry is trying to get a better understanding of his costs by categorizing them as fixed or variable. The cost of mustard are most likely to be considered fixed costs. Harry's Hotdogs is a small street vendor business owned by Harry Huggins. Harry is trying to get a better understanding of his costs by categorizing them as fixed or variable. Which of the following costs are most likely to be considered fixed costs? a. the cost of mustard b. the cost of hotdog buns c. wages paid to workers that sell hotdogs d. the cost of bookkeeping services
False; D. the cost of bookkeeping services.
One of the most important properties of cost curves is that for most producers , the average total cost curve never crosses the marginal cost curve. One of the most important properties of cost curves is that a. for most producers , the average total cost curve never crosses the marginal cost curve. b. the average fixed cost curve must eventually rise. c. the average total cost curve first rises, then falls with increased output. d. the marginal cost curve eventually rises with the quantity of output.
False; D. the marginal cost curve eventually rises with the quantity of output
If a firm produces nothing, total costs will be zero. If a firm produces nothing, which of the following costs will be zero? a. total cost b. fixed cost c. opportunity cost d. variable cost
False; D. variable costs
In the long run, the firm can operate on ATC (A).
False; In the long run, the firm can operate on which of the following average total cost curves? a. ATCA b. ATCB c. ATCC d. All of the above are correct. D
To an economist, it is conceivable that the objective that motivates an individual entrepreneur to start a business arises from an innate love for the type of business that he or she starts
False; a. an innate love for the type of business that he or she starts. b. a desire to earn a profit. c. an altruistic desire to provide the world with a good product. d. All of the above are correct. D is the answer
Marginal cost tells us the a. value of all resources used in a production process. b. marginal increment to profitability when price is constant. c. amount by which total cost rises when output is increased by one unit. d. amount by which output rises when labor is increased by one unit.
False; amount by which total cost rises when output is increased by one unit. D
Those things that must be forgone to acquire a good are called substitutes
False; are called opportunity costs.
Average total cost is very high when a small amount of output is produced because average variable cost is high. Average total cost is very high when a small amount of output is produced because a. average variable cost is high. b. average fixed cost is high. c. marginal cost is high. d. All of the above are correc
False; b. average fixed cost is high.
When marginal cost exceeds average total cost, average fixed cost must be rising. When marginal cost exceeds average total cost, a. average fixed cost must be rising. b. average total cost must be rising. c. average total cost must be falling. d. marginal cost must be falling.
False; b. average total cost must be rising.
Average total cost tells us the total cost of the first unit of output, if total cost is divided evenly over all the units produced. Average total cost tells us the a. total cost of the first unit of output, if total cost is divided evenly over all the units produced. b. cost of a typical unit of output, if total cost is divided evenly over all the units produced. c. cost of the last unit of output, if total cost does not include a fixed cost component. d. variable cost of a firm that is producing at least one unit of output.
False; b. cost of a typical unit of output, if total cost is divided evenly over all the units produced.
The amount by which total cost rises when the firm produces one additional unit of output is called average cost. The amount by which total cost rises when the firm produces one additional unit of output is called a. average cost. b. marginal cost. c. fixed cost. d. variable cost.
False; b. marginal cost
The average total cost of producing one widget is $1.00. The average total cost of producing one widget is a. $1.00. b. $10.00. c. $11.00. d. $22.00
False; c. $11.00
$13.00 is the variable cost of producing five widgets. What is the variable cost of producing five widgets? a. $13.00 b. $14.00 c. $15.00 d. It can't be determined from the information given.
False; c. $15.00
When marginal cost is less than average total cost, average total cost is rising. When marginal cost is less than average total cost, a. marginal cost must be falling. b. average variable cost must be falling. c. average total cost is falling. d. average total cost is rising.
False; c. average total cost is falling.
When a firm is operating at an efficient scale, average variable cost is minimized. When a firm is operating at an efficient scale, a. average variable cost is minimized. b. average fixed cost is minimized. c. average total cost is minimized. d. None of the above are correct.
False; c. average total cost is minimized.
The changing slope of the total cost curve reflects decreasing average variable cost. The changing slope of the total cost curve reflects a. decreasing average variable cost. b. decreasing average total cost. c. decreasing marginal product. d. increasing fixed cost.
False; c. decreasing marginal product.
When adding another unit of labor leads to an increase in output that is smaller than increases in output that resulted from adding previous units of labor, we have the property of diminishing labor. When adding another unit of labor leads to an increase in output that is smaller than increases in output that resulted from adding previous units of labor, we have the property of a. diminishing labor. b. diminishing output. c. diminishing marginal product. d. negative marginal product.
False; c. diminishing marginal product.
. Some costs do not vary with the quantity of output produced. Those costs are called marginal costs. Some costs do not vary with the quantity of output produced. Those costs are called a. marginal costs. b. average costs. c. fixed costs. d. incurred costs.
False; c. fixed costs.
John owns a shoe-shine business. His accountant most likely includes wages John could earn washing windows. John owns a shoe-shine business. His accountant most likely includes which of the following costs on his financial statements? a. wages John could earn washing windows b. dividends John's money was earning in the stock market before John sold his stock and bought a shoe-shine booth c. the cost of shoe polish d. All of the above are correct
False; c. includes the cost of shoe polish.
Suppose Jan is starting up a small lemonade stand business. Variable costs for Jan's lemonade stand would include the cost of building the lemonade stand. Suppose Jan is starting up a small lemonade stand business. Variable costs for Jan's lemonade stand would include the cost of a. building the lemonade stand. b. hiring an artist to design a logo for her sign. c. lemonade mix. d. All of the above are correct
False; c. lemonade mix
Diseconomies of scale occur when average fixed costs are falling Diseconomies of scale occur when a. average fixed costs are falling. b. average fixed costs are constant. c. long-run average total costs rise as output increases. d. long-run average total costs fall as output increases.
False; c. long-run average total costs rise as output increases.
If marginal cost is rising, average variable cost must be falling. If marginal cost is rising, a. average variable cost must be falling. b. average fixed cost must be rising. c. marginal product must be falling. d. marginal product must be rising.
False; c. marginal product must be falling.
The efficient scale of the firm is the quantity of output that maximizes marginal product. The efficient scale of the firm is the quantity of output that a. maximizes marginal product. b. maximizes profit. c. minimizes average total cost. d. minimizes average variable cost
False; c. minimizes average total cost.
Diminishing marginal product suggests that the marginal cost of an extra worker is unchanged. Diminishing marginal product suggests that the marginal a. cost of an extra worker is unchanged. b. cost of an extra worker is less than the previous worker's marginal cost. c. product of an extra worker is less than the previous worker's marginal product. d. product of an extra worker is greater than the previous worker's marginal product.
False; c. product of an extra worker is less than the previous worker's marginal product.
An example of an explicit cost of production would be the cost of forgone labor earnings for an entrepreneur. An example of an explicit cost of production would be a. the cost of forgone labor earnings for an entrepreneur. b. the lost opportunity to invest in other capital markets when the money is invested in one's business. c. the cost of flour for a baker. d. None of the above are correct
False; c. the cost of flour for a baker.
One assumption that distinguishes short-run cost analysis from long-run cost analysis for a profit-maximizing firm is that in the short run, output is not variable. One assumption that distinguishes short-run cost analysis from long-run cost analysis for a profit-maximizing firm is that in the short run, a. output is not variable. b. the number of workers used to produce the firm's product is fixed. c. the size of the factory is fixed. d. there are no fixed costs.
False; c. the size of the factory is fixed.
The marginal product of an input in the production process is the increase in total revenue obtained from an additional unit of that input. The marginal product of an input in the production process is the increase in a. total revenue obtained from an additional unit of that input. b. profit obtained from an additional unit of that input. c. total revenue obtained from an additional unit of that input. d. quantity of output obtained from an additional unit of that input
False; d. quantity of output obtained from an additional unit of that input
Average total cost is equal to output/total cost. Average total cost is equal to a. output/total cost. b. total cost - total quantity of output. c. average variable cost + total fixed cost. d. total cost/output.
False; d. total cost/ output.
The amount of money that a firm receives from the sale of its output is called total gross profit.
False; from the sale of its total revenue
In the long run, inputs that were fixed in the short run remain fixed. In the long run, a. inputs that were fixed in the short run remain fixed. b. inputs that were fixed in the short run become variable. c. inputs that were variable in the short run become fixed. d. variable inputs are rarely used.
False;B. inputs that were fixed in the short run become variable.
The firm's efficient scale is the quantity of output that minimizes average total cost. The firm's efficient scale is the quantity of output that minimizes a. average total cost. b. average fixed cost. c. average variable cost. d. marginal cost.
True; a. average total cost
(A) is most likely to represent marginal cost.
True
0 is the variable cost of producing zero widgets.
True
ATC (A) is most likely to characterize the short-run average total cost curve of the smallest factory.
True
All are true of the production function (not pictured) that underlies this total cost function. 1. Total output increases as the quantity of inputs increases, but at a decreasing rate. 2. Marginal product is diminishing for all levels of input usage. 3. The slope of the production function decreases as the quantity of inputs increases.
True
One would expect to observe diminishing marginal product of labor when crowded office space reduces the productivity of new workers.
True
The cost of producing the typical unit of output is the firm's average total cost.
True
The marginal cost of the fifth unit of output equals the total cost of five units minus the total cost of four units. Which of the following statements is false? a. The marginal cost of the fifth unit of output equals the total cost of five units minus the total cost of four units. b. The total variable cost of seven units equals the average variable cost of seven units times seven. c. If marginal cost is rising, then average variable cost must be rising. d. The marginal cost of the fifth unit of output equals the total variable cost of five units minus the total variable cost of four units.
True;
This particular firm is necessarily experiencing increasing marginal product when curve A is falling. This particular firm is necessarily experiencing increasing marginal product when curve a. A is falling. b. B is falling. c. C is falling. d. D is falling.
True; A is falling
An example of an implicit cost of production would be the income an entrepreneur could have earned working for someone else. An example of an implicit cost of production would be a. the income an entrepreneur could have earned working for someone else. b. the cost of raw materials for producing bread in a bakery. c. the cost of a delivery truck in a business that rarely makes deliveries. d. All of the above are correct.
True; A.
Assume a certain firm regards the number of workers it employs as variable, and that it regards the size of its factory as fixed. This assumption is often realistic in the short run, but not in the long run. Assume a certain firm regards the number of workers it employs as variable, and that it regards the size of its factory as fixed. This assumption is often realistic a. in the short run, but not in the long run. b. in the long run, but not in the short run. c. both in the short run and in the long run. d. neither in the short run nor in the long run
True; A.
Economic profit will never exceed accounting profit. Economic profit a. will never exceed accounting profit. b. is most often equal to accounting profit. c. is always at least as large as accounting profit. d. is a less complete measure of profitability than accounting profit.
True; A.
Producing an additional cookie is always more costly than producing the previous cookie, this is consistent with the shape of the total cost curve Which of the statements below is most consistent with the shape of the total cost curve? a. Producing an additional cookie is always more costly than producing the previous cookie. b. Total production of cookies decreases with additional units of input. c. Producing additional cookies is equally costly, regardless of how many cookies are already being produced. d. Producing additional cookies becomes increasingly costly only when the number of cookies already being produced is large.
True; A.
At levels of output below M the firm experiences economies of scale. At levels of output below M the firm experiences a. economies of scale. b. diseconomies of scale. c. economic profit. d. accounting profit
True; a. economies of scale.
The average fixed cost curve always declines with increased levels of output. The average fixed cost curve a. always declines with increased levels of output. b. always rises with increased levels of output. c. declines as long as it is above marginal cost. d. declines as long as it is below marginal cost.
True; A.
The nature of the underlying production function can be described as: "output increases at a decreasing rate with additional units of input." Which of the following statements best captures the nature of the underlying production function? a. Output increases at a decreasing rate with additional units of input. b. Output increases at an increasing rate with additional units of input. c. Output decreases at a decreasing rate with additional units of input. d. Output decreases at an increasing rate with additional units of input.
True; A.
This firm experiences diseconomies of scale at output levels above N. This firm experiences diseconomies of scale at what output levels? a. output levels above N b. output levels between M and N c. output levels below M d. All of the above are correct, if the firm is operating in the long run.
True; A.
Total cost can be divided into two types. Those two types are fixed costs and variable costs. Total cost can be divided into two types. Those two types are a. fixed costs and variable costs. b. fixed costs and marginal costs. c. variable costs and marginal costs. d. average costs and marginal costs.
True; A.
Total revenue equals total output multiplied by price per unit of output. Total revenue equals a. total output multiplied by price per unit of output. b. total output divided by profit. c. (total output multiplied by sales price) - inventory surplus. d. (total output multiplied by sales price) - inventory shortage.
True; A.
$1.00 is the marginal cost of producing the first widget. What is the marginal cost of producing the first widget? a. $1.00 b. $10.00 c. $11.00 d. It can't be determined from the information given.
True; A. $1.00
The cost of producing an additional unit of output is the firm's marginal cost. The cost of producing the typical unit of output is the firm's a. average total cost. b. opportunity cost. c. variable cost. d. marginal cost
True; A. Average total cost
If a firm wants to capitalize on economies of scale, it may be able to do so by assigning limited tasks to their employees, so they can master those tasks If a firm wants to capitalize on economies of scale, it may be able to do so by a. assigning limited tasks to their employees, so they can master those tasks. b. employing a smaller number of workers. c. producing a smaller quantity of output. d. All of the above are correct
True; A. assigning limited tasks to their employees, so they can master those tasks.
With regard to cookie production, the figure implies diminishing marginal product of workers. With regard to cookie production, the figure implies a. diminishing marginal product of workers. b. diminishing marginal cost of cookie production. c. decreasing cost of cookie production. d. increasing marginal product of workers.
True; A. diminishing marginal product of workers.
The long-run average total cost curve is always flatter than the short-run average total cost curve, but not necessarily horizontal. The long-run average total cost curve is always a. flatter than the short-run average total cost curve, but not necessarily horizontal. b. horizontal. c. falling as output increases. d. rising as output increases
True; A. flatter
A production function is a relationship between inputs and quantity of output. A production function is a relationship between a. inputs and quantity of output. b. inputs and revenue. c. inputs and costs. d. inputs and profit.
True; A. inputs and quantity of output
At all levels of production beyond the point where the marginal cost curve crosses the average variable cost curve, average variable cost rises. At all levels of production beyond the point where the marginal cost curve crosses the average variable cost curve, average variable cost a. rises. b. remains unaffected. c. falls. d. All of the above are possible, it depends on the shape of the marginal cost curve.
True; A. rises
The amount of money that a firm pays to buy inputs is called total cost. The amount of money that a firm pays to buy inputs is called a. total cost. b. variable cost. c. marginal cost. d. fixed cost
True; A. total cost
When a firm is able to put idle equipment to use by hiring another worker, variable costs will rise. When a firm is able to put idle equipment to use by hiring another worker, a. variable costs will rise. b. variable costs will fall. c. fixed costs will fall. d. fixed costs and variable costs will rise.
True; A. variable cost will rise
The firm can vary the number of workers it employs, but not the size of its factory, this assumption is often realistic for a firm in the short run. Which of these assumptions is often realistic for a firm in the short run? a. The firm can vary both the size of its factory and the number of workers it employs. b. The firm can vary the size of its factory, but not the number of workers it employs. c. The firm can vary the number of workers it employs, but not the size of its factory. d. The firm can vary neither the size of its factory nor the number of workers it employs.
True; C. The firm can vary the number of workers it employs, but not the size of its factory.
As the number of workers increases, total output increases, but at a decreasing rate. As the number of workers increases, a. total output increases, but at a decreasing rate. b. marginal product increases, but at a decreasing rate. c. marginal product increases at an increasing rate. d. total output decreases.
True; a.
When a firm is making a profitmaximizing production decision, the cost of something is what you give up to get it is likely to be most important to the firm's decision. When a firm is making a profit-maximizing production decision, which of the following principles of economics is likely to be most important to the firm's decision? a. The cost of something is what you give up to get it. b. A country's standard of living depends on its ability to produce goods and services. c. Prices rise when the government prints too much money. d. Governments can sometimes improve market outcomes.
True; a.
Accountants are primarily interested in the flow of money into and out of firms. Accountants are primarily interested in the a. flow of money into and out of firms. b. stock of assets of firms. c. marginal costs of production of firms. d. taxes due on capital assets of firms
True; a. flow of money into and out of firms.
The length of the short run is different for different types of firms. The length of the short run a. is different for different types of firms. b. can never exceed 3 years. c. can never exceed 1 year. d. is always less than 6 months.
True; a. is different for different types of firms.
Explicit costs require an outlay of money by the firm. Explicit costs a. require an outlay of money by the firm. b. include all of the firm's opportunity costs. c. include income that is forgone by the firm's owners. d. All of the above are correct.
True; a. require an outlay of money by the firm.
For a firm that uses labor to produce output, the production function depicts the relationship between the quantity of labor and the quantity of output. Which of the following statements about a production function is correct for a firm that uses labor to produce output? a. The production function depicts the relationship between the quantity of labor and the quantity of output. b. The slope of the production function measures marginal cost. c. The quantity of output is measured along the horizontal axis. d. All of the above are correct.
a. The production function depicts the relationship between the quantity of labor and the quantity of output
When marginal cost is less than average total cost, marginal cost must be falling. When marginal cost is less than average total cost, a. marginal cost must be falling. b. average variable cost must be falling. c. average total cost is falling. d. average total cost is rising.
false, c. average total cost is falling.
A total-cost curve shows the relationship between the quantity of an input used and the total cost of production. A total-cost curve shows the relationship between the a. quantity of an input used and the total cost of production. b. quantity of output produced and the total cost of production. c. total cost of production and profit. d. total cost of production and total revenue.
false; B. the quantity of output produced and the total cost of production.
Average fixed cost will be always rising. Average fixed cost will be a. always rising. b. always falling. c. U-shaped. d. constant.
false; b. always falling
The marginal cost curve crosses the average total cost curve at the efficient scale. The marginal cost curve crosses the average total cost curve at a. the efficient scale. b. the minimum point on the average total cost curve. c. a point where the marginal cost curve is rising. d. All of the above are correct.
true; A.
