Question

Question Completion Status: QUESTION 31 An efficient scale of the firm is the quantity of output that maximizes marginal product • maximizes profit minimizes average total cost • minimizes average variable cost QUESTION 32 If marginal cost is rising - average variable cost must be falling average fixed cost must be rising marginal product must be falling • marginal product must be rising QUESTION 33 Diminishing marginal product suggests that additional units of output beccome less costly as more output is produced marginal cost is upward sloping the firm is at full capacity adding additional workers will lower total cost QUESTION 34 The efficient scale of the firm is the quantity of output that • maximizes marginal product maximizes profit • minimizes average total cost • minimizes average variable cost QUESTION 35 The average fixed cost curve always declines with increased levels of output always rises with increased levels of output is flat with respect to output . declines as long as marginal cost is going down QUESTION 36 Average total cost is very high when a small amount of output is produced because - average variable cost is high • average fixed cost is high marginal cost is high • marginal product is high QUESTION 37 Average total cost is increasing whenever total cost is increasing marginal cost is increasing marginal cost is less than average total cost marginal cost is greater than average total cost QUESTION 38 Click Save and Submit to save and submit. Click Save AN Answers to save all answers

Answer 1

Ans) 1) Efficient scale is where average total cost stops falling or is at minimum. Option c.

2) Marginal cost and marginal product are inversely related. So when marginal cost increases, marginal product decreases.

Option c.

3) Diminishing marginal product states that as more and more workers are added, the additional benefit gained by each additional worker declines. Diminishing marginal product causes marginal cost curve to rise.

Option b.

4) Option c.

5) Average fixed cost curve is downward sloping as fixed cost keeps on decreasing with increasing output.

Option a.

6) Average total cost is high when less quantity is produced because fixed cost dominates the total cost.

Option a.

7) Average total cost is increasing when marginal cost is more than average cost.

Option d.