Homework Answers
17. When the average total cost curve is rising , then the marginal cost curve will be above the average total cost curve. Hence,option(C) is correct.
18. Explicit costs are the sum of actual monetary payments made for resources used to produce a good. Hence,option(B) is correct.
19. If a given amount of output per period can be produced several small-sized plants at the same unit cost as in one much larger plant , an economist would say that this long -run situation reflects the existence of constant returns to scale. Hence,option(C) is correct.
20. Wage= $5 per hour
MPP= 20 units per hour
Unit labor cost = $5/20 = $0.25 per unit. Hence,option(A) is correct.
21. We can see in the given figure, When Q= 120 , ATC= $144 and AVC= $104
So, AFC= ATC-AVC = $(144-104)= $40
So, Total fixed cost , TFC= AFC(Q) = $(40)(120)= $4800
Hence,option(D) is correct.
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