question
Another term used interchangeably with "Fixed Costs" is ___________.
answer
period costs
question
The "long-run" Average Total Cost (ATC) Curve is _________.
answer
"u-shaped"
question
According to the textbook, one should _______________________________.
answer
ignore all sunk costs when making decisions.
question
Answer the question based on the table below:
Units TFC$ TVC$ TC$ AFC AVC ATC MC (Marginal Costs)
0 $ 40 $ 0 $ 40 * *
1 40 20 60 40 __ __ ___
2 40 30 70 20 __ __ ___
The average variable cost (AVC) of 2 units is ______.
Units TFC$ TVC$ TC$ AFC AVC ATC MC (Marginal Costs)
0 $ 40 $ 0 $ 40 * *
1 40 20 60 40 __ __ ___
2 40 30 70 20 __ __ ___
The average variable cost (AVC) of 2 units is ______.
answer
15
question
Variable Costs are defined as:
answer
those costs that change with the level of output.
question
If the long-run average-total-cost curve for a firm is upward sloping, this indicates that there is (are) ______________.
answer
diseconomies of scale
question
The "law of diminishing returns" is most useful for explaining the ____________.
answer
shape of "short-run" marginal cost curve
question
If the If the MP curve lies above the AP curve, and the MP curve is decreasing, then the AP curve would be _______.
answer
increasing
question
"Marginal Costs" are synonymous with ________ costs.
answer
variable
question
If a company can produce 300 units for a Total Cost of $ 1000 and the Total Variable Cost of producing the same 300 units is $ 800, then ________________________.
answer
Total Fixed Costs equal $ 200.
question
The Average Fixed Cost (AFC) decreases as output increases. This economic concept is specifically called ___________.
answer
"spreading the overhead"
question
Answer the question based on the table below:
Units TFC$ TVC$ TC$ AFC AVC ATC MC (Marginal Costs)
0 $ 40 $ 0 $ 40 * *
1 40 20 60 40 __ __ ___
2 40 30 70 20 __ __ ___
The marginal cost of the 2nd unit is ______.
Units TFC$ TVC$ TC$ AFC AVC ATC MC (Marginal Costs)
0 $ 40 $ 0 $ 40 * *
1 40 20 60 40 __ __ ___
2 40 30 70 20 __ __ ___
The marginal cost of the 2nd unit is ______.
answer
10
question
Answer the question based on the table below:
Units TFC$ TVC$ TC$ AFC AVC ATC MC (Marginal Costs)
0 $ 40 $ 0 $ 40 * *
1 40 20 60 40 __ __ ___
2 40 30 70 20 __ __ ___
If this company shuts down, the economic profit (loss) will equal ______.
Units TFC$ TVC$ TC$ AFC AVC ATC MC (Marginal Costs)
0 $ 40 $ 0 $ 40 * *
1 40 20 60 40 __ __ ___
2 40 30 70 20 __ __ ___
If this company shuts down, the economic profit (loss) will equal ______.
answer
40
question
Suppose a firm produces 200,000 units annually, and sells all units for $ 4 each. Their explicit costs of production are $ 300,000, and their implicit costs of production are $ 100,000. This firm has an Accounting Profit of ________, and an Economic Profit of __________.
answer
$ 500,000; $ 400,000
question
Which would best describe the "long-run" for a firm as defined by economists?
answer
Plant capacity is variable.
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