Question 1

Use the figure below to answer the following questions.
  Figure 11.3.2
-Refer to Figure 11.3.2,which illustrates the short-run average and marginal cost curves.The average variable cost curve is curve
A)A.
B)B.
C)C.
D)D.
E)none of the above.

Accepted Answer

The average variable cost curve is the curve that intersects with the marginal cost curve at its minimum point. In the given figure, curve B is the only one that intersects with the marginal cost curve at its minimum point, hence it is the average variable cost curve.

Question 2

Use the figure below to answer the following questions.
  Figure 11.3.2
-Refer to Figure 11.3.2,which illustrates short-run average and marginal cost curves.Which one of the following statements is false?
A)Average fixed cost decreases with output.
B)The vertical gap between curves B and C is equal to average variable cost.
C)Line B comes closer to line C as output increases because of a decrease in average fixed cost.
D)Curve D is the marginal cost curve.
E)The vertical gap between curves B and C is equal to average fixed cost.

Accepted Answer

The answer of Use the figure below to answer the...

Question 3

Which of the following are correct? According to the law of diminishing returns, (1)marginal product eventually rises.
(2)marginal product eventually falls.
(3)marginal cost eventually rises.
(4)marginal cost eventually falls.
A)(1)and (3)
B)(1)and (4)
C)(2)and (3)
D)(2)and (4)
E)(4)

Accepted Answer

According to the law of diminishing returns, as more units of a variable input are added to a fixed input, the marginal product eventually falls. This means that choice (2) is correct. Additionally, as the marginal product falls, the marginal cost eventually rises. Therefore, choice (3) is also correct. Choices (1) and (4) are incorrect because the law of diminishing returns does not state that marginal product or marginal cost eventually rise.

Question 4

Use the table below to answer the following questions.
Table 11.3.1
 $\begin{array}{ccccc}\hline\text { Labour }&\text { Output }&TFC&TVC&TC\
\text { (workers per }&\text { (teapots per }&\text { (dollars per }&\text { (dollars per }&\text { (dollars per }\
\text { day) } & \text { day) } & \text { day) } & \text { day) }& \text { day) }\
\hline 0 & 0 & 20 & 0 & 20 \
1 & 4 & 20 & -- & 45 \
2 & 9 & 20 & -- & 70 \
3 & 13 & 20 & -- & 95 \
4 & 16 & 20 & 100 & -- \
5 & 18 & 20 & 125 & 145\\hline
\end{array}$
-Refer to Table 11.3.1,which gives Tania's total cost schedule.The average fixed cost of producing 9 teapots per day is
A)$2.22.
B)$1.25.
C)$10.00.
D)$1.11.
E)$1.54.

Accepted Answer

The answer of Use the table below to answer the...

Question 5

Use the figure below to answer the following questions.
  Figure 11.3.2
-Refer to Figure 11.3.2,which illustrates the short-run average and marginal cost curves.The marginal cost curve is curve
A)A.
B)B.
C)C.
D)D.
E)none of the above.

Accepted Answer

The answer of Use the figure below to answer the...

Question 6

Marginal cost is equal to
A)total cost divided by output.
B)the increase in total cost divided by the increase in output.
C)the increase in total cost divided by the increase in labour input,given the amount of capital.
D)total variable cost minus total fixed cost.
E)the increase in total cost divided by the increase in variable cost.

Accepted Answer

Marginal cost is defined as the increase in total cost that arises from producing one additional unit of output. Therefore, it is calculated by dividing the increase in total cost by the increase in output. The other options do not accurately describe marginal cost.

Question 7

Use the table below to answer the following questions.
Table 11.3.2
 $\begin{array}{ccccc}\hline\text { Labour }&\text { Output }&TFC&TVC&TC\
\text { (workers per }&\text { (teapots per }&\text { (dollars per }&\text { (dollars per }&\text { (dollars per }\
\text { day) } & \text { day) } & \text { day) } & \text { day) }& \text { day) }\
\hline 0 & 0 & 30 & 0 & 30 \
1 & 3 & 30 & 20 & -- \
2 & 8 & 30 & 40 & -- \
3 & 12 & 30 & 60 & -- \
4 & 14 & 30 & -- & 110 \
5 & 15 & 30 & -- & 130\\hline
\end{array}$
-Refer to Table 11.3.2,which gives Tania's total cost schedule.When output increases from 8 to 12 teapots,the marginal cost of one of the 4 teapots is
A)$20.
B)$5.
C)$1.
D)$6.67.
E)$2.

Accepted Answer

The answer of Use the table below to answer the...

Question 8

Use the table below to answer the following questions.
Table 11.3.1
 $\begin{array}{ccccc}\hline\text { Labour }&\text { Output }&TFC&TVC&TC\
\text { (workers per }&\text { (teapots per }&\text { (dollars per }&\text { (dollars per }&\text { (dollars per }\
\text { day) } & \text { day) } & \text { day) } & \text { day) }& \text { day) }\
\hline 0 & 0 & 20 & 0 & 20 \
1 & 4 & 20 & -- & 45 \
2 & 9 & 20 & -- & 70 \
3 & 13 & 20 & -- & 95 \
4 & 16 & 20 & 100 & -- \
5 & 18 & 20 & 125 & 145\\hline
\end{array}$
-Refer to Table 11.3.1,which gives Tania's total cost schedule.The average total cost of producing 16 teapots per day is
A)$2.
B)$5.
C)$3.33.
D)$7.50.
E)$5.51.

Accepted Answer

The answer of Use the table below to answer the...

Question 9

Choose the correct equation.
A)TFC=TC/Q
B)TFC=TC-AVC
C)TFC=TC-TVC
D)TFC=TVC/Q
E)TFC=TVC-TC

Accepted Answer

TFC (total fixed cost) is equal to TC (total cost) minus TVC (total variable cost). This equation is reflected in choice C. The other choices do not accurately reflect the relationship between TFC, TC, and TVC.

Question 10

Use the table below to answer the following questions.
Table 11.3.1
 $\begin{array}{ccccc}\hline\text { Labour }&\text { Output }&TFC&TVC&TC\
\text { (workers per }&\text { (teapots per }&\text { (dollars per }&\text { (dollars per }&\text { (dollars per }\
\text { day) } & \text { day) } & \text { day) } & \text { day) }& \text { day) }\
\hline 0 & 0 & 20 & 0 & 20 \
1 & 4 & 20 & -- & 45 \
2 & 9 & 20 & -- & 70 \
3 & 13 & 20 & -- & 95 \
4 & 16 & 20 & 100 & -- \
5 & 18 & 20 & 125 & 145\\hline
\end{array}$
-Refer to Table 11.3.1,which gives Tania's total cost schedule.When output increases from 4 to 9 teapots,the marginal cost of one of the 5 teapots is
A)$4.25.
B)$4.
C)$25.
D)$6.25.
E)$5.

Accepted Answer

To find the marginal cost of producing the 5th teapot, we need to look at the change in total cost when output increases from 4 to 5 teapots. 
At 4 teapots, the total cost is $20. 
At 5 teapots, the total cost is $25. 
The change in total cost is $25 - $20 = $5. 
Therefore, the marginal cost of producing the 5th teapot is $5. 
Hence, the correct answer is E.

Question 11

If an increase in output from 5 to 10 teapots increases total cost from $100 to $200,the marginal cost of one of those 5 teapots is
A)$10.
B)$20.
C)$22.
D)$25.
E)dependent upon the amount of extra labour used.

Accepted Answer

The marginal cost is calculated by the change in total cost divided by the change in quantity. Here, the total cost increases by $100 ($200 - $100) for an increase of 5 teapots (10 - 5). Thus, the marginal cost per teapot is $100 / 5 = $20.

Question 12

Use the figure below to answer the following question.
  Figure 11.3.1
-Refer to Figure 11.3.1.Which one of the following statements is false?
A)The total fixed cost curve A.
B)Total variable cost and total cost both increase with output.
C)The vertical gap between curves B and C is equal to total variable cost.
D)Marginal cost is equal to the slope of curve C.
E)Total fixed cost is constant.

Accepted Answer

The answer of Use the figure below to answer the...

Question 13

Which one of the following statements is false?
A)Average total cost is total cost per unit of output.
B)Average fixed cost plus average variable cost equals average total cost.
C)Marginal cost is the increase in total cost resulting from a one-unit increase in output.
D)Total cost equals fixed cost plus average cost.
E)Marginal cost depends on the amount of labour hired.

Accepted Answer

Total cost equals fixed cost plus variable cost (not average cost).

Question 14

The range over which average variable cost is decreasing is the same as the range over which
A)marginal cost is increasing.
B)average fixed cost is decreasing.
C)marginal product is decreasing.
D)average product is decreasing.
E)average product is increasing.

Accepted Answer

The answer of The range over which average variable cost...

Question 15

Average variable cost is at a minimum at the same output at which
A)average product is at a maximum.
B)average product is at a minimum.
C)marginal product is at a maximum.
D)marginal product is at a minimum.
E)marginal cost is at a minimum.

Accepted Answer

The answer of Average variable cost is at a minimum...

Question 16

As soon as diminishing returns set in,a firm's
A)marginal product increases.
B)average fixed cost decreases.
C)marginal cost decreases.
D)marginal cost increases.
E)total cost decreases.

Accepted Answer

As diminishing returns set in, the marginal product of the firm decreases, meaning that each additional unit of input yields less output. This causes the marginal cost of production to increase as the cost of producing each additional unit of output becomes higher. Therefore, the correct answer is D) marginal cost increases.

Question 17

Which one of the following statements is false?
A)The average total cost curve and average variable cost curve are U-shaped.
B)The gap between the average total cost curve and the average variable cost curve equals marginal cost.
C)The gap between the average total cost curve and the average variable cost curve narrows as output increases.
D)The marginal cost curve intersects the average variable cost curve at minimum average variable cost.
E)The marginal cost curve intersects the average total cost curve at minimum average total cost.

Accepted Answer

The gap between the average total cost curve and the average variable cost curve equals average fixed cost, not marginal cost.

Question 18

Use the table below to answer the following questions.
Table 11.3.2
 $\begin{array}{ccccc}\hline\text { Labour }&\text { Output }&TFC&TVC&TC\
\text { (workers per }&\text { (teapots per }&\text { (dollars per }&\text { (dollars per }&\text { (dollars per }\
\text { day) } & \text { day) } & \text { day) } & \text { day) }& \text { day) }\
\hline 0 & 0 & 30 & 0 & 30 \
1 & 3 & 30 & 20 & -- \
2 & 8 & 30 & 40 & -- \
3 & 12 & 30 & 60 & -- \
4 & 14 & 30 & -- & 110 \
5 & 15 & 30 & -- & 130\\hline
\end{array}$
-Refer to Table 11.3.2,which gives Tania's total cost schedule.The average total cost of producing 14 teapots is
A)$7.86.
B)$6.75.
C)$7.
D)$1.75.
E)$27.50.

Accepted Answer

To find the average total cost of producing 14 teapots, we look at the column for total cost and find the cost when 14 teapots are produced, which is $110. Dividing $110 by 14 teapots gives us an average total cost of $7.86. Therefore, the answer is A.

Question 19

Which one of the following statements is false?
A)Total variable cost plus total fixed cost equals total cost.
B)Marginal cost equals the change in total cost divided by the change in output.
C)Average total cost is calculated by dividing total cost by the level of output.
D)The average cost curve is U-shaped.
E)The total cost curve is U-shaped.

Accepted Answer

The total cost curve is not U-shaped. It starts from the origin and slopes upwards as output increases without ever reversing direction. The average cost curve, on the other hand, is U-shaped because of the relationship between fixed cost and variable cost as output varies.

Question 20

Which one of the following is false?
A)The marginal cost curve intersects the average variable cost curve and the average total cost curve at their maximum points.
B)When marginal cost is greater than average variable cost,average variable cost is increasing.
C)When marginal cost is greater than average total cost,average total cost is increasing.
D)The average total cost curve is U-shaped.
E)The average fixed cost curve is downward sloping.

Accepted Answer

The marginal cost curve intersects the average variable cost curve and the average total cost curve at their minimum points, not maximum points. This is because when marginal cost is equal to average variable cost (or average total cost), the cost per unit is not increasing or decreasing. Therefore, it is at its lowest point.

Quiz 11: Output and Costs

Use the figure below to answer the following questions. Figure 11.3.2 -Refer to Figure 11.3.2,which illustrates the short-run average and marginal cost curves.The average variable cost curve is curve

Use the figure below to answer the following questions. Figure 11.3.2 -Refer to Figure 11.3.2,which illustrates short-run average and marginal cost curves.Which one of the following statements is false?

Which of the following are correct? According to the law of diminishing returns, (1) marginal product eventually rises. (2) marginal product eventually falls. (3) marginal cost eventually rises. (4) marginal cost eventually falls.

Use the figure below to answer the following questions. Figure 11.3.2 -Refer to Figure 11.3.2,which illustrates the short-run average and marginal cost curves.The marginal cost curve is curve

Marginal cost is equal to

Choose the correct equation.

If an increase in output from 5 to 10 teapots increases total cost from $100 to $200,the marginal cost of one of those 5 teapots is

Use the figure below to answer the following question. Figure 11.3.1 -Refer to Figure 11.3.1.Which one of the following statements is false?

Which one of the following statements is false?

The range over which average variable cost is decreasing is the same as the range over which

Average variable cost is at a minimum at the same output at which

As soon as diminishing returns set in,a firm's

Which one of the following statements is false?

Which one of the following statements is false?

Which one of the following is false?