Question :
11) The total variable cost curve ________ because ________ as : 1241159
11) The total variable cost curve ________ because ________ as output increases.
A) slopes upward; variable cost increases
B) slopes upward; marginal cost increases
C) slopes downward; variable cost increases
D) slopes downward; marginal cost increases
E) is horizontal; fixed cost does not change
12) Marginal cost equals
A) total cost minus total variable cost.
B) total fixed cost divided by total output.
C) total variable cost divided by total output.
D) the change in total cost that results from a one-unit increase in output.
E) the change in fixed cost that results from a one-unit increase in output.
13) The change in cost that results from a one-unit increase in output is called the
A) average fixed cost.
B) per-unit variable cost.
C) per-unit total cost.
D) marginal cost.
E) average cost change.
14) As a typical firm increases its output, its marginal cost
A) is constant.
B) decreases at first and then increases.
C) increases at first and then decreases.
D) decreases.
E) is negative at first and then positive.
15) When marginal cost is positive, total cost is ________ as output increases.
A) increasing
B) decreasing
C) constant
D) negative
E) undefined
16) If total fixed cost increases, which of the following will NOT change?
A) total cost
B) average fixed cost
C) marginal cost
D) average total cost
E) ALL costs increase when total fixed cost increases.
17) Scott owns a law-enforcement training operation in Boise, Idaho. He employs three trainers. The last trainer Scott hired increased Scott’s total cost by $466 per week even though the trainer brought in only one new client. Hence Scott’s
A) total variable cost equals $466.
B) marginal cost of the last client equals $466.
C) marginal cost of the last worker equals $233.
D) total variable cost equals $233.
E) total fixed cost of the last client equals $466.
OUTPUT
Total Cost
Fixed Cost
Variable Cost
Average Variable Cost
Average
Total Cost
0
$100
$100
1
$140
$100
$40
$40
$140
2
$160
$100
$60
$30
$80
3
$200
$100
$100
$33.33
$67
4
$240
$100
$140
$35
$60
5
$330
$100
$230
$46
$66
18) The table above gives the cost schedule for The X Firm. The data show that The X Firm’s ________ curve is ________.
A) ATC; U-shaped because the firm fixed costs are spread over larger amounts of output and the firm experiences decreasing marginal returns
B) AFC; U-shaped because the firm spreads its fixed costs over larger and large amounts of output
C) AVC; always declining because costs are divided across ever-increasing amounts of output
D) MC; U-shaped because explicit costs exceed implicit costs
E) ATC; U-shaped because output increases as costs increase
Labor (workers)
Output (bikes)
Total fixed costs (dollars)
Total variable cost (dollars)
Total cost (dollars)
0
0
200
1
20
100
2
50
3
60
4
64
19) The table above gives costs at Jan’s Bike Shop. Unfortunately, Jan’s record keeping has been spotty. Each worker is paid $100 a day. Labor costs are the only variable costs of production. What is the total cost of producing 50 bikes?
A) $100
B) $200
C) $300
D) $400
E) $500
20) The table above gives costs at Jan’s Bike Shop. Unfortunately, Jan’s record keeping has been spotty. Each worker is paid $100 a day. Labor costs are the only variable costs of production. What is the total fixed cost of producing 64 bikes?
A) $200
B) $300
C) $400
D) $500
E) $600
21) The table above gives costs at Jan’s Bike Shop. Unfortunately, Jan’s record keeping has been spotty. Each worker is paid $100 a day. Labor costs are the only variable costs of production. What is the total variable cost of producing 60 bikes?
A) $200
B) $300
C) $400
D) $500
E) None of the above answers are correct.
