Question : 121) Refer to Figure 7-2. Which of the following choices : 1384206

 

121) Refer to Figure 7-2. Which of the following choices correctly identifies the cost curves in part (ii) of the figure?

A)Curve 4 is the marginal cost curve.

Curve 5 is the average fixed cost curve.

Curve 6 is the average variable cost curve.

Curve 7 is the average total cost curve.

B)Curve 4 is the average total cost curve.

Curve 5 is the marginal cost curve.

Curve 6 is the average variable cost curve.

Curve 7 is the average fixed cost curve.

C)Curve 4 is the average fixed cost curve.

Curve 5 is the average total cost curve.

Curve 6 is the marginal cost curve.

Curve 7 is the average variable cost curve.

D)Curve 4 is the marginal cost curve.

Curve 5 is the average total cost curve.

Curve 6 is the average variable cost curve.

Curve 7 is the average fixed cost curve.

E)Curve 4 is the marginal cost curve.

Curve 5 is the average variable cost curve.

Curve 6 is the average fixed cost curve.

Curve 7 is the average total cost curve.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

122) Refer to Table 7-5. Given the information in the table about short-run costs, this firm would minimize the average variable cost of production when producing

A) 10 chairs.

B) 15 chairs.

C) 20 chairs.

D) 25 chairs.

E) 30 chairs.

123) Refer to Table 7-5. Given the information in the table about short-run costs, this firm would minimize the average total cost of production when producing

A) 10 chairs.

B) 15 chairs.

C) 20 chairs.

D) 25 chairs.

E) 30 chairs.

124) Refer to Table 7-5. At what level of output is this firm at its capacity?

A) 10 chairs

B) 15 chairs

C) 20 chairs

D) 25 chairs

E) 30 chairs

125) Suppose a firm producing digital cameras is operating such that marginal costs are higher than average costs. If the firm produces one more camera, average costs will

A) rise.

B) fall.

C) reach a point of diminishing returns.

D) remain constant.

E) reach their maximum.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

126) Refer to Table 7-6. The firm’s marginal product of its variable factor is maximized when it produces ________ units of output.

A) 50

B) 90

C) 100

D) 110

E) 170

127) Refer to Table 7-6. Suppose there are no fixed costs. The firm reaches it’s capacity level of output when its output is equal to ________ units.

A) 50

B) 110

C) 150

D) 190

E) 210

128) Refer to Table 7-6. If the firm produces 130 pairs of shoes, and the fixed cost is $550, then the firm’s total cost is

A) $7000.

B) $8000.

C) $9000.

D) $10 000.

E) $12 000.

129) Refer to Table 7-6.  Suppose this firm is producing 210 pairs of shoes per time period and that the variable factor of production is labour.  Which of the following statements best describes this firm’s production?

A) Additional units of labour employed will increase the average variable cost of producing shoes.

B) Marginal cost is higher than average variable cost, so average product must be rising.

C) Marginal cost is higher than average variable cost, so marginal product must be rising.

D) Each additional unit of labour employed reduces the average variable cost of the pairs of shoes.

E) The firm is producing below its capacity.

130) A firm that is maximizing its profits by producing a certain level of output must also be

A) minimizing its cost of producing that output.

B) maximizing its sales.

C) minimizing its variable costs.

D) maximizing its output.

E) maximizing its revenue.