Question

Total cost is calculated as _____.

Select one:

a.

average fixed cost plus average variable cost

b.

fixed cost plus variable cost

c.

the additional cost of the last unit produced

d.

marginal cost plus variable cost

e.

marginal cost plus fixed cost

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The law of diminishing marginal returns states that:

Select one:

a.

long-run average cost declines as output increases.

b.

if the marginal product is above the average product, the average will rise.

c.

as units of a variable input are added to a given amount of fixed inputs, the marginal product of the variable input eventually diminishes.

d.

as a person consumes more of a good, the marginal satisfaction from that good eventually diminishes.

e.

if marginal product is positive, total product rises.

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Which of the following would most likely reach the long run most rapidly?

Select one:

a.

A nuclear power plant

b.

A college

c.

A lumber mill

d.

A shopping mall

e.

A hot dog stand

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Which of the following is true of marginal product?

Select one:

a.

When marginal product is negative, total product is increasing.

b.

When marginal product is increasing, total product is decreasing.

c.

When marginal product is positive and decreasing, total product is decreasing.

d.

When marginal product is positive and decreasing, total product is increasing by increasing amounts.

e.

When marginal product is increasing, total product is increasing by increasing amounts.

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Answer #1

1.

Answer: b) Fixed cost plus variable cost

Total cost is the sum of fixed cost and the variable cost.

2.

Answer: c) as units of a variable input are added to a given amount of fixed inputs, the marginal product of the variable input eventually diminishes.

The law of diminishing marginal returns states that as one increases the input in the production, the marginal output starts declining at some point of production process.

4.

Answer: e)When marginal product is increasing, total product is increasing by increasing amounts.

Consider the following cases of marginal product and total product:

1.when the Marginal product is positive, the total product rises.

2. When the marginal is zero, the total product is constant.

3 when the marginal product is negative,the total product declines.

If marginal cost exceeds average variable cost,
average variable cost is decreasing
average variable cost is negative
average variable cost is increasing
marginal cost is greater than average total cost
average fixed cost is increasing
If marginal cost exceeds average variable cost,
average variable cost is decreasing
average variable cost is negative
average variable cost is increasing
marginal cost is greater than average total cost
average fixed cost is increasing
Which of the following is true of marginal product?
When...

1. Long run average costs rise as output (q) increases
Select one:
a. Economy of Scale
b. Decreasing Returns to Scale
c. Increasing Returns to Scale
d. Constant Returns to Scale
e. Diseconomy of Scale
2.
A production function where the MRTS is constant at all points.
Isoquants are straight lines.
Select one:
a. Production Function
b. Isoquant
c. Perfect Substitutes Production Function
d. Isocost Line
e. Technology Function
f. Fixed-Proportions Production Function
3.
A production function with L-shaped isoquants...

Average variable cost
A.
decreases when its value is greater than marginal cost, and
increases when its value is less than marginal cost.
B.
decreases when its value is less than marginal cost, and
increases when its value is greater than marginal cost.
C.
is perpetually increasing, sometimes initially at increasing
rates but eventually at decreasing ones.
D.
perpetually decreases.
Average fixed costs
A.
are perpetually decreasing as output increases, but at a
decreasing rate.
B.
are perpetually decreasing as...

Fixed costs include:
Select one:
a. variable labor expenses.
b. output-related energy costs.
c. output-related raw material costs.
d. variable interest costs for borrowed capital.
If a total product curve exhibits increasing returns to a
variable input, the cost elasticity is:
Select one:
a. equal to one.
b. greater than one.
c. unknown, without further information.
d. less than one.
f the productivity of variable factors is decreasing in the
short-run:
Select one:
a. marginal cost must increase as output...

1. How are marginal and average product related graphically to
marginal and average variable cost?
a. They are mirror images of each other.
b. The maximums of the product curves are the minimum of the
cost curves.
c. As marginal and average product increase the respective cost
curves decrease.
d. All of the above.
2 How can long-run total cost be calculated?
a. Multiplying average costs by output.
b. Adding positive total fixed costs to total variable
costs.
c. Multiplying...

The short-run average total cost curve
A) is U-shaped.
B) diminishes initially because average fixed costs increase.
C) increases eventually because of increasing returns.
D) All of the above answers are correct.

1- Match the following
Total Cost C = Total Cost - Fixed Cost
Fixed Cost A. = Variable Cost + Fixed Cost
Variable Cost B. = Total Cost - Variable Cost
Economic Costs .D. include Opportunity Cost
2- Match the following
Average fixed cost A= fixed cost / quantity
Average variable cost B= Variable cost / Q
Average total cost C= total cost / quantity
Marginal Cost D= Delta total cost / delta quantity
3-
If Marginal Cost is equal...

Which of the following is most likely to be a variable cost for
a manufacturer?
A. energy
costs. C.
rental payments on computer equipment.
B. interest payments on business
loans. D.
real estate taxes.
3. If a firm’s accounting profit is positive,
A. its economic profit will also be
positive.
B. its economic profit will be positive
if the accounting profit exceeds implicit
costs.
C. its revenues cover both explicit and
implicit costs.
4. Economic profit can be best defined as:
A....

The vertical distance between the average total cost and the
average variable cost curves is:
a.
constant with respect to output.
b.
decreasing with respect to output.
c.
increasing with respect to output.
d.
equal to total fixed costs.
e.
none of the above.
1 points
QUESTION 11
The point at which the SRAC curve is tangent to the LRAC
curve:
a.
represents the most efficient wa to use a given plant.
b.
is always the output where MC=AC....

suppose that a firm's only variable cost is labor. when 100
workers are used, the average product of labor is 60, and the
marginal product of the 100th worker is 50. the wage rate is $25
and the total fixed cost is $1000. (show all calculations)
A) what is the average variable cost?
B) what is the marginal cost?
C) what is the average total cost?
D) The following are either true or false. indicate which is
correct and explain....

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