Question

QUESTION 4 The term variable costs refers to O prices of inputs that vary a lot increases in the prices of any input costs that vary with the type of final product being produced costs that vary with the quantity of output being produced QUESTION 5 If a firm's marginal cost exceeds its marginal revenue, then O profit is negative the firm should shut down cutting back production will increase profits the firm should reduce its per-unit cost by increasing its output QUESTION 6 Economists assume that the goal of the firm is to increase profit maximize output minimize costs maximize profit

Answer 1

4. Variable costs are the costs that vary with each additional unit produced. The variable costs increase as more output is produced and vice versa. So, 'option d' is correct.

5. If the marginal cost is greater than the marginal revenue then the cost of producing one additional unit of output is more than what it generates as revenue which means that in order to maximize profits, firm should cut down production till the point at which the marginal revenue is equal to the marginal cost. So, 'option c' is correct.

6. Economists assume that the goal of a firm is to maximize profits. So, 'option d' is correct.

7. Costs that are independent of a firm's level of output are called fixed costs. These costs remain the same irrespective of the output produced. So, the correct answer is 'option a'.

8. The correct answer is 'option c'. The annual insurance payment is to be made even if the car ride is not taken. So, it is least likely to affect the decision.

9. A good is said to be non-rivalrous in nature if its production by one individual does not decrease the amount available to others. Among the given options, internet is a non-rival good because it can be used by anyone without affecting its availability for others. So, 'option b' is correct.