Question

6. Total cost is calculated as

a.the sum of total fixed cost and total variable cost.

b.the product of average total cost and price.

c. the sum of all the firm's explicit costs.

d. the sum of average fixed cost and average variable cost

7. The formula for the total fixed cost is

a.TFC = TC + TVC.

b.TFC = TVC -TC

c.. TFC = TC/TVC.

d.TFC = TC -TVC

8.The Lawn Ranger, a landscaping company, has total costs of $4,000 and total variable costs of $1,000. The Lawn Ranger's total fixed costs are _____

9.Wilbur's Widgets, a widget company, produces 100 widgets. Its average fixed cost is $5 and its total variable cost is $300. What is the total cost of producing 100 widgets?

10. The formula for average fixed costs is

a.TFC - q.

b.TFC/q

c.q/TFC

d.%q/%TFC.

11.________ are likely a fixed cost of a firm.

a.Wages paid to employees

b.The payments for supplies

c. Lease payments for office space

d. Travel expenses to meet with clients

12. Diminishing marginal returns implies

a.decreasing average variable costs.

b.decreasing marginal costs.

c.increasing marginal costs

d.decreasing the average fixed costs.

13.In the short run when the marginal product of labor ________, the marginal cost of an additional unit of output ________.

a.rises; rises

b. falls; falls

c. rises; falls

d. falls; doesn't change

14.If marginal cost is between average variable cost and average total cost, then

a.both average variable cost and average total cost are increasing.

b. both average variable cost and average total cost are decreasing.

c.average variable cost is increasing and average total cost is decreasing

d.average variable cost is decreasing and average total cost is increasing.

15.  The marginal cost curve intersects the average total cost curve at the ________ value of the average total cost curve.

a.maximum

b.minimum

c.zero

d.average

Answer 1

Ans.6- (A)
Total cost = total fixed cost + total variable cost
Ans.7- (D)
TFC= TC -TVC
Ans.8- 3000
TFC = TC-TVC = 4000-1000 = 3000
Ans.9- 800
total cost = total variable cost + total fixed cost
total variable cost = 300
total fixed cost = AFC*Q = 5*100 = 500
So, total cost = 800
Ans.10- (B)