Question

47. Jen-Chi's Tea House produces 500 4-ounce packets of tea per week. Jen-Chi's vanad is $14.10 per packet and his fixed cost per week is $1.775. Jen-Chi's total cost per week is. A) $17.65. B) $5.275. C) $7.050. D) $8,825. 48. If a firm has $10,000 in variable costs and no fixed cost, then the time period referred to is the: A) market period. B) short run. C) long run. D) very long run. 49. At 500 units of output, total cost is $50,000 and variable cost is $5,000. What does fixed cost equal at 500 units? A) $50.000 B) $5,000 D) $45,000 50. The Wonderful Gadget Company produces 500 gadgets per week with 50 employees. It hires an additional worker and output rises to 507 gadgets. The marginal product of the last worker hired is gadget(s). A) 500 B) 507 C) 7 D) 1

Answer 1

47. Total cost = Total variable cost + Total fixed cost

Total variable cost = $(14.10 * 500) = $7050

Total fixed cost = $1775

Total cost = $(7050 + 1775) = $8825

Answer: option D

48. There are no fixed cost in the long run because in Long run, all fixed costs become variable.

Answer: option C

49. Total cost = Total variable cost + total fixed cost

Or, Total fixed cost = TC - TVC = $(50000 - 5000) = $45000

Answer: option D