5. The cost of producing an additional unit of output is the firm’s a. Marginal cost b. Average total cost c. Variab...
5. The cost of producing an additional unit of output is the firm’s
a. Marginal cost
b. Average total cost
c. Variable cost
d. Average variable cost
6. Which of the following equations represents a typical (generic) production function studied by economists?
a. E = mc2
b. MC = (change in total costs)/(change in quantity)
c. Profit = Total Revenue – Total Costs
d. Q = f(K,L) e. ECON 202 = fun
7. A firm would never choose to continue production when earning $0 in economic profit.
a. True
b. False
Homework Answers
5. The cost of producing an additional unit of output is the firm’s
a. Marginal cost
Explanation: Marginal cost is the increase in total cost due to production of an additional output.
6. Which of the following equations represents a typical (generic) production function studied by economists?
d. Q = f(K,L)
Ans. Production function shows the relation between inputs and
output.
7. A firm would never choose to continue production when earning $0 in economic profit.
b. False
Ans. for a firm to continue producing, it must be able to cover all
its variable costs.
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56,57
Exhibit 89 Marginal cost Average total cost Dollars per unit Average variable cost 92999 Quantity per period 56. Refer to Exhibit 8.9, which shows a perfectly competitive firm's short-run output decisions. At price Pa, the form a. produces nothing. b. produces at a specific output to minimize its short-run loss. c. earns short-run economic profit by producing at a specific output. d. is indifferent between producing and shutting down. e, produces at a specific output to earn a normal...
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