question
If output rises from 150 units per hour to 170 units per hour as another worker is hired and the additional worker receives $25 in wages per hour, it follows that marginal cost is________________
answer
$1.25
question
As marginal product rises, _________________
answer
the marginal cost curve falls
question
If AFC is $8 at a quantity of output of 1,000 units, and ATC is $12 at the same level of output, it follows that....
answer
AVC is $4
question
Fixed costs....
answer
do not vary as output varies
question
Average fixed cost....
answer
is greater at lower levels of output than at higher levels;
exists only in the short run
exists only in the short run
question
If the wage rate is constant and diminishing marginal returns have already set in, then__________________
answer
marginal cost increases
question
Which of the following statements is sequentially correct?
-Changes in marginal product change marginal cost, which changes average variable and average total cost
-Changes in marginal cost change marginal product, which changes average variable and average total cost
-Changes in average variable cost change marginal cost, which changes average total cost, which changes marginal product
-Changes in average variable and average total cost change marginal cost, which changes marginal product
-Changes in marginal product change marginal cost, which changes average variable and average total cost
-Changes in marginal cost change marginal product, which changes average variable and average total cost
-Changes in average variable cost change marginal cost, which changes average total cost, which changes marginal product
-Changes in average variable and average total cost change marginal cost, which changes marginal product
answer
changes in marginal product change marginal cost, which changes average variable and average total cost
question
If the marginal cost curve for a firm first declines and then rises, it follows that the marginal product of the variable input....
answer
first rises and then declines
question
At 100 units of output, total cost is $22,000 and total variable cost is $14,000. At 100 units of output, what is the value of average total cost, average variable cost, and average fixed cost, respectively?
answer
$220; $140; $80
question
The change in total cost that results from a change in output is __________ cost
answer
marginal
question
Which of these statements is false?
-A fixed cost is a cost that does not change as output changes
-In the short run, all inputs are fixed inputs
-There are no fixed costs in the long run
-Total costs are equal to total fixed costs plus total variable costs
-A fixed cost is a cost that does not change as output changes
-In the short run, all inputs are fixed inputs
-There are no fixed costs in the long run
-Total costs are equal to total fixed costs plus total variable costs
answer
in the short run, all inputs are fixed inputs
question
(T/F) The marginal cost curve cuts through the AVC, ATC, and AFC curves at their lowest points
answer
false
question
There are 30 students in a class. The average grade for the first 29 students is 87. The grade of the remaining student is 84. Given this student's grade, the average grade of the 30-student class will be______________
answer
lower than 87
question
The marginal cost curve passes through the __________ curve at its lowest point
answer
average variable cost + average total cost
question
(T/F) As the marginal product of a variable input increases, the marginal cost decreases
answer
true
question
The firm negotiates a new agreement with its workers for lower wages. The ATC curve should be __________ and the AFC curve should be __________ after the agreement goes into effect
answer
lower; unchanged
question
(T/F) The law of diminishing marginal returns helps to explain why the marginal cost curve typically has a downward-sloping portion
answer
false
question
At 500 units of output, total cost is $35,000 and total variable cost is $22,000. What does total fixed cost equal at 500 units?
answer
$13,000
question
As a firm produces more units of a good, its.....
answer
fixed costs remain constant in the short run and its variable costs rise
question
Diane's Donuts will begin selling donuts next week. Diane figures that the average variable cost to make each donut will be constant at $0.30. She has already paid $20,000 for the donut-making machinery and one year's rent. What will Diane's total variable costs be if she sells 36,500 donuts in one year?
answer
$10,950
question
Gizmos, Inc. produces gizmos at an average total cost of $15 and an average variable cost of $12. The only fixed input used in the production of gizmos costs $240. What are the total costs? (Hint: Average Fixed Costs must equal 3, which allows you to find the quantity)
answer
$1,200
question
You paid $25 for your ticket to the football game, only to see your favorite team losing 28-0 at the end of the first quarter. That $25 should now be regarded as a(n) __________ cost that economists say should be __________ in your decision on whether or not to stay at the game or leave.
answer
sunk; disregarded
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