58) In a graph of a typical firm's AFC, ATC, and AVC curves, the
A) AVC curve lies above the ATC curve.
B) ATC curve lies below the AFC curve.
C) distance between the ATC curve and the AVC curve equals the AFC.
D) distance between the AVC curve and the AFC curve equals the ATC.
E) AVC curve crosses the MC curve at the point where the MC is at its minimum.
59) As we observe the cost curves graph, we see that the
A) MC curve intersects the ATC curve at its maximum.
B) MC curve cannot be U-shaped.
C) ATC curve always has a negative slope.
D) MC curve intersects the AVC curve and ATC curve at their minimums.
E) MC constantly falls as output increases.
60) In a figure showing the average total cost curve and the average variable cost curve, the vertical distance between the two curves is equal to the
A) marginal cost.
B) average fixed cost.
C) total fixed cost.
D) total variable cost.
E) average marginal cost.
61) The vertical distance between the total cost curve and the total variable cost curve ________ as output increases and the vertical distance between the average total cost curve and average variable cost curve ________ as output increases.
A) is constant; decreases
B) decreases; is constant
C) increases; decreases
D) decreases; increases
E) decreases; decreases
62) The marginal cost curve is U-shaped. Over the range of output for which the marginal cost is falling as output increases, the marginal product is
A) increasing.
B) decreasing.
C) constant.
D) probably changing, but there is no stable relationship between the marginal cost and the marginal product.
E) not defined.
63) The relationship between the MP and MC curves is
A) over the range where the MP curve has a negative slope, the MC curve also has a negative slope.
B) there is no predictable relationship.
C) over the range where the MC curve has a positive slope, the MP curve also has a positive slope.
D) over the range where the MP curve has a positive slope, the MC curve has a negative slope.
E) that the MP is not defined when the MC curve has a negative slope.
64) If marginal cost increases when output increases, then
A) marginal product must decrease when output increases.
B) average fixed cost is constant.
C) total cost is constant.
D) average variable cost must increase when output increases.
E) average total cost must decrease when output increases.
65) If another worker is hired with a marginal product greater than the previously hired worker, which of the following will be true?
A) total costs will decrease
B) fixed costs will decrease
C) marginal cost will increase
D) marginal cost will decrease
E) average fixed costs will increase
66) When the marginal product is increasing as the quantity increases, then as the quantity increases the
A) average product is decreasing.
B) marginal cost is decreasing.
C) total cost is decreasing.
D) total product is decreasing.
E) fixed cost is increasing.
67) If we know the amount of total cost, average total cost, average variable cost, and marginal cost for each level of output, how can we find the level of output where the marginal product is the greatest?
A) It is the output for which the marginal cost equals average variable cost.
B) It is the output for which the total cost is maximized.
C) It is the output for which the marginal cost is minimized.
D) It is the output for which the marginal cost equals average total cost.
E) There is no way to find where marginal product is the greatest knowing only cost data.
