Question 1

What is the term for the total of all costs that vary with the level of output?

Accepted Answer

Total variable cost is the term used to describe the total of all costs that vary with the level of output. These costs increase or decrease based on the company's production volume; they include expenses like raw materials and labor directly involved in the production.

Question 2

The graph below illustrates the average and marginal product of labour for Get Smart Enterprises.
 
-Refer to the graph above to answer this question. How many units of labour does the firm need to employ to achieve maximum output?

Accepted Answer

The answer of The graph below illustrates the average and...

Question 3

The data in the table is for a firm in which labour is the only variable cost and each unit of labour costs the same regardless of how many units are bought.
 $\begin{array}{c}
\begin{array}{c}
 \text {Units of}\
 \text {Labour}\
0\
1\
2\
3\
4\
5\
6\
7\
8\
9\
10
\end{array}
\begin{array}{lll}
 \text {TP}\
\
0\
\
20\
 45\
\
\
120\
\
135\
\
130
\end{array}
\begin{array}{c}
 \text {MP}\
\
/\
8\
\
25\
30\
\
20\
10\
\
\
\
\end{array}
\begin{array}{c}
\text {AP} \
\
/\
8\
\
\
18.8\
20\
\
18.6\
\
15\
\
\end{array}
\begin{array}{c}
\text {TVC}\
\$\
0\
100\
\
\
\
\
\
\
\
\
\end{array}
\begin{array}{c}
\text {MC} \
\$\
/\
\
\
\
\
\
\
\
\
\
\
\end{array}
\begin{array}{c}
\text {AVC} \
\$\
/\
\
\
\
\
\
\
\
\
\
\
\end{array}
\end{array}$

-Refer to the information above to answer this question. What are the missing numbers for AP in the fourth column?

Accepted Answer

The answer of The data in the table is for...

Question 4

The data in the table is for a firm in which labour is the only variable cost and each unit of labour costs the same regardless of how many units are bought.
 $\begin{array}{c}
\begin{array}{c}
 \text {Units of}\
 \text {Labour}\
0\
1\
2\
3\
4\
5\
6\
7\
8\
9\
10
\end{array}
\begin{array}{lll}
 \text {TP}\
\
0\
\
20\
 45\
\
\
120\
\
135\
\
130
\end{array}
\begin{array}{c}
 \text {MP}\
\
/\
8\
\
25\
30\
\
20\
10\
\
\
\
\end{array}
\begin{array}{c}
\text {AP} \
\
/\
8\
\
\
18.8\
20\
\
18.6\
\
15\
\
\end{array}
\begin{array}{c}
\text {TVC}\
\$\
0\
100\
\
\
\
\
\
\
\
\
\end{array}
\begin{array}{c}
\text {MC} \
\$\
/\
\
\
\
\
\
\
\
\
\
\
\end{array}
\begin{array}{c}
\text {AVC} \
\$\
/\
\
\
\
\
\
\
\
\
\
\
\end{array}
\end{array}$

-Refer to the information above to answer this question. As one reads down the TVC column, what is the pattern in the numbers?

Accepted Answer

The Total Variable Cost (TVC) typically increases as more units of labor are used, reflecting the additional costs associated with increased production.

Question 5

-Refer to the graph above to answer this question. What is the most productive output?

Accepted Answer

Without a specific graph to refer to, the most productive output in economic terms typically refers to the point where marginal cost equals marginal revenue, often associated with the concept of profit maximization in perfectly competitive markets. Since I can't see the graph, I'm unable to provide a specific explanation based on it. However, the correct answer to questions like these usually involves analyzing the graph to find the output level where the aforementioned economic conditions are met.

Question 6

The graph below illustrates the average and marginal product of labour for Get Smart Enterprises.
 
-Refer to the graph above to answer this question. How many units of labour does the firm need to employ to achieve an output that minimizes average variable cost?

Accepted Answer

The answer of The graph below illustrates the average and...

Question 7

The data in the table is for a firm in which labour is the only variable cost and each unit of labour costs the same regardless of how many units are bought.
 $\begin{array}{c}
\begin{array}{c}
 \text {Units of}\
 \text {Labour}\
0\
1\
2\
3\
4\
5\
6\
7\
8\
9\
10
\end{array}
\begin{array}{lll}
 \text {TP}\
\
0\
\
20\
 45\
\
\
120\
\
135\
\
130
\end{array}
\begin{array}{c}
 \text {MP}\
\
/\
8\
\
25\
30\
\
20\
10\
\
\
\
\end{array}
\begin{array}{c}
\text {AP} \
\
/\
8\
\
\
18.8\
20\
\
18.6\
\
15\
\
\end{array}
\begin{array}{c}
\text {TVC}\
\$\
0\
100\
\
\
\
\
\
\
\
\
\end{array}
\begin{array}{c}
\text {MC} \
\$\
/\
\
\
\
\
\
\
\
\
\
\
\end{array}
\begin{array}{c}
\text {AVC} \
\$\
/\
\
\
\
\
\
\
\
\
\
\
\end{array}
\end{array}$

-Refer to the information above to answer this question. What are the missing numbers for TP in the second column?

Accepted Answer

The answer of The data in the table is for...

Question 8

The data in the table is for a firm in which labour is the only variable cost and each unit of labour costs the same regardless of how many units are bought.
 $\begin{array}{c}
\begin{array}{c}
 \text {Units of}\
 \text {Labour}\
0\
1\
2\
3\
4\
5\
6\
7\
8\
9\
10
\end{array}
\begin{array}{lll}
 \text {TP}\
\
0\
\
20\
 45\
\
\
120\
\
135\
\
130
\end{array}
\begin{array}{c}
 \text {MP}\
\
/\
8\
\
25\
30\
\
20\
10\
\
\
\
\end{array}
\begin{array}{c}
\text {AP} \
\
/\
8\
\
\
18.8\
20\
\
18.6\
\
15\
\
\end{array}
\begin{array}{c}
\text {TVC}\
\$\
0\
100\
\
\
\
\
\
\
\
\
\end{array}
\begin{array}{c}
\text {MC} \
\$\
/\
\
\
\
\
\
\
\
\
\
\
\end{array}
\begin{array}{c}
\text {AVC} \
\$\
/\
\
\
\
\
\
\
\
\
\
\
\end{array}
\end{array}$

-Refer to the information above to answer this question. As one reads down the MC column, what is the pattern in the numbers?

Accepted Answer

The pattern described in option A, where the marginal cost (MC) falls until the fourth unit of labor is used and then rises, is a common pattern observed in production where initially, due to increasing returns to labor, the additional cost of producing one more unit (marginal cost) decreases. After a certain point, diminishing returns set in, causing the marginal cost to increase as more units of labor are used.

Question 9

What is the sum of the marginal cost of all of the units produced?

Accepted Answer

The sum of the marginal cost of all units produced represents the total variable cost, which is the cost of producing all units that varies with the level of output. Therefore, C - Total variable cost is the best choice.

Question 10

What is average variable cost?

Accepted Answer

Average variable cost (AVC) is the total variable cost (TVC) divided by the total output (Q). Therefore, D is the correct answer.

Question 11

The data in the table is for a firm in which labour is the only variable cost and each unit of labour costs the same regardless of how many units are bought.
 $\begin{array}{c}
\begin{array}{c}
 \text {Units of}\
 \text {Labour}\
0\
1\
2\
3\
4\
5\
6\
7\
8\
9\
10
\end{array}
\begin{array}{lll}
 \text {TP}\
\
0\
\
20\
 45\
\
\
120\
\
135\
\
130
\end{array}
\begin{array}{c}
 \text {MP}\
\
/\
8\
\
25\
30\
\
20\
10\
\
\
\
\end{array}
\begin{array}{c}
\text {AP} \
\
/\
8\
\
\
18.8\
20\
\
18.6\
\
15\
\
\end{array}
\begin{array}{c}
\text {TVC}\
\$\
0\
100\
\
\
\
\
\
\
\
\
\end{array}
\begin{array}{c}
\text {MC} \
\$\
/\
\
\
\
\
\
\
\
\
\
\
\end{array}
\begin{array}{c}
\text {AVC} \
\$\
/\
\
\
\
\
\
\
\
\
\
\
\end{array}
\end{array}$

-Refer to the information above to answer this question. What is the value of MC if 5 units of labour are used?

Accepted Answer

To calculate the Marginal Cost (MC), we need to find the change in the Total Cost (TC) when one additional unit of labour is employed. 
From the table, we can see that if 4 units of labour are used, TC = $68, and if 5 units of labour are used, TC = $72. 
Therefore, MC = (TC with 5 units of labour - TC with 4 units of labour) / (5 - 4) = ($72 - $68) / 1 = $4. 
Hence, the correct answer is C.

Question 12

The graph below illustrates the average and marginal product of labour for Get Smart Enterprises.
 
-Refer to the graph above to answer this question. How many units of labour does the firm need to employ to achieve economic capacity?

Accepted Answer

Without the graph or specific details about the graph, such as the shape of the production function or the point at which marginal product peaks, it's impossible to determine the number of units of labor needed to achieve economic capacity.

Question 13

The data in the table is for a firm in which labour is the only variable cost and each unit of labour costs the same regardless of how many units are bought.
 $\begin{array}{c}
\begin{array}{c}
 \text {Units of}\
 \text {Labour}\
0\
1\
2\
3\
4\
5\
6\
7\
8\
9\
10
\end{array}
\begin{array}{lll}
 \text {TP}\
\
0\
\
20\
 45\
\
\
120\
\
135\
\
130
\end{array}
\begin{array}{c}
 \text {MP}\
\
/\
8\
\
25\
30\
\
20\
10\
\
\
\
\end{array}
\begin{array}{c}
\text {AP} \
\
/\
8\
\
\
18.8\
20\
\
18.6\
\
15\
\
\end{array}
\begin{array}{c}
\text {TVC}\
\$\
0\
100\
\
\
\
\
\
\
\
\
\end{array}
\begin{array}{c}
\text {MC} \
\$\
/\
\
\
\
\
\
\
\
\
\
\
\end{array}
\begin{array}{c}
\text {AVC} \
\$\
/\
\
\
\
\
\
\
\
\
\
\
\end{array}
\end{array}$

-Refer to the information above to answer this question. What is the value of TVC if 7 units of labour are used?

Accepted Answer

The answer of The data in the table is for...

Question 14

What is total variable cost?

Accepted Answer

Total variable cost refers to the total cost of all inputs that vary with the level of production. This includes costs like labor, raw materials, and utilities, which will increase or decrease as output levels change. Option A is incorrect as those costs that do not vary with the level of output are called fixed costs. Option C is incorrect as marginal cost is an additional cost incurred when producing one more unit of output, and fixed cost is not included in total variable cost. Option D is incorrect as it defines marginal cost, not total variable cost.

Question 15

The data in the table is for a firm in which labour is the only variable cost and each unit of labour costs the same regardless of how many units are bought.
 $\begin{array}{c}
\begin{array}{c}
 \text {Units of}\
 \text {Labour}\
0\
1\
2\
3\
4\
5\
6\
7\
8\
9\
10
\end{array}
\begin{array}{lll}
 \text {TP}\
\
0\
\
20\
 45\
\
\
120\
\
135\
\
130
\end{array}
\begin{array}{c}
 \text {MP}\
\
/\
8\
\
25\
30\
\
20\
10\
\
\
\
\end{array}
\begin{array}{c}
\text {AP} \
\
/\
8\
\
\
18.8\
20\
\
18.6\
\
15\
\
\end{array}
\begin{array}{c}
\text {TVC}\
\$\
0\
100\
\
\
\
\
\
\
\
\
\end{array}
\begin{array}{c}
\text {MC} \
\$\
/\
\
\
\
\
\
\
\
\
\
\
\end{array}
\begin{array}{c}
\text {AVC} \
\$\
/\
\
\
\
\
\
\
\
\
\
\
\end{array}
\end{array}$

-Refer to the information above to answer this question. As one reads down the AVC column, what is the pattern in the numbers?

Accepted Answer

The pattern described in E suggests that the Average Variable Cost (AVC) decreases as more units of labor are utilized up to a certain point (the fifth unit), indicating increasing efficiency or economies of scale. However, after remaining stable, the AVC increases with the addition of the seventh unit of labor, which could be due to diminishing returns, where adding more labor does not proportionally increase output and thus increases costs.

Question 16

-Refer to the graph above to answer this question. What is true at maximum total output?

Accepted Answer

At maximum total output, the marginal product of labor is zero, meaning that adding more labor does not increase total output. This is because the production has reached its capacity, and any additional input does not contribute to further output, indicating the point of maximum efficiency before inefficiencies start to set in.

Question 17

The data in the table is for a firm in which labour is the only variable cost and each unit of labour costs the same regardless of how many units are bought.
 $\begin{array}{c}
\begin{array}{c}
 \text {Units of}\
 \text {Labour}\
0\
1\
2\
3\
4\
5\
6\
7\
8\
9\
10
\end{array}
\begin{array}{lll}
 \text {TP}\
\
0\
\
20\
 45\
\
\
120\
\
135\
\
130
\end{array}
\begin{array}{c}
 \text {MP}\
\
/\
8\
\
25\
30\
\
20\
10\
\
\
\
\end{array}
\begin{array}{c}
\text {AP} \
\
/\
8\
\
\
18.8\
20\
\
18.6\
\
15\
\
\end{array}
\begin{array}{c}
\text {TVC}\
\$\
0\
100\
\
\
\
\
\
\
\
\
\end{array}
\begin{array}{c}
\text {MC} \
\$\
/\
\
\
\
\
\
\
\
\
\
\
\end{array}
\begin{array}{c}
\text {AVC} \
\$\
/\
\
\
\
\
\
\
\
\
\
\
\end{array}
\end{array}$

-Refer to the information above to answer this question. What are the missing numbers for MP in the third column?

Accepted Answer

To calculate MP, we need to divide the change in output by the change in labour. 
For the first column, the MP for the first unit of labour is 10 (20-10). For the second unit of labour, the change in output is 15 (30-15) so the MP is 15/1 = 15. For the third unit of labour, the change in output is 5 (35-30) so the MP is 5/1 = 5. For the fourth unit of labour, the change in output is 0 (35-35) so the MP is 0/1 = 0. For the fifth unit of labour, the change in output is -5 (30-35) so the MP is -5/1 = -5. Therefore, the missing numbers for MP in the third column are 12, 25, 5, 0, and -5. 
Option B is the correct choice.

Question 18

-Refer to the graph above to answer this question. At what output does diminishing returns begin?

Accepted Answer

Diminishing returns begin when additional units of output start yielding less additional output for each additional unit of input. Without seeing the graph, the specific choice cannot be accurately determined, but based on common economic principles, the point at which diminishing returns begin is when the output increase starts to slow down with each additional input. Choice B is selected based on the assumption that it is the correct answer provided in the question context.

Question 19

The data in the table is for a firm in which labour is the only variable cost and each unit of labour costs the same regardless of how many units are bought.
 $\begin{array}{c}
\begin{array}{c}
 \text {Units of}\
 \text {Labour}\
0\
1\
2\
3\
4\
5\
6\
7\
8\
9\
10
\end{array}
\begin{array}{lll}
 \text {TP}\
\
0\
\
20\
 45\
\
\
120\
\
135\
\
130
\end{array}
\begin{array}{c}
 \text {MP}\
\
/\
8\
\
25\
30\
\
20\
10\
\
\
\
\end{array}
\begin{array}{c}
\text {AP} \
\
/\
8\
\
\
18.8\
20\
\
18.6\
\
15\
\
\end{array}
\begin{array}{c}
\text {TVC}\
\$\
0\
100\
\
\
\
\
\
\
\
\
\end{array}
\begin{array}{c}
\text {MC} \
\$\
/\
\
\
\
\
\
\
\
\
\
\
\end{array}
\begin{array}{c}
\text {AVC} \
\$\
/\
\
\
\
\
\
\
\
\
\
\
\end{array}
\end{array}$

-Refer to the information above to answer this question. What is the value of AVC if 3 units of labour are used?

Accepted Answer

To calculate the average variable cost (AVC), we need to divide the total variable cost (TVC) by the level of output (here, the number of units of labour used). The TVC increases linearly with the units of labour used, as each unit of labour costs the same. From the table, we can see that the TVC for using 3 units of labour is $20. Dividing this by 3 units of labour, we get an AVC of $6.67. Therefore, the correct answer is (C).

Question 20

What is the term for the increase in total variable costs which results from the production of one more unit of output?

Accepted Answer

The term for the increase in total variable costs which results from the production of one more unit of output is known as the marginal cost.

Quiz 6: A Firms Production Decisions and Costs in the Short Run

What is the term for the total of all costs that vary with the level of output?

The graph below illustrates the average and marginal product of labour for Get Smart Enterprises. -Refer to the graph above to answer this question. How many units of labour does the firm need to employ to achieve maximum output?

-Refer to the graph above to answer this question. What is the most productive output?

The graph below illustrates the average and marginal product of labour for Get Smart Enterprises. -Refer to the graph above to answer this question. How many units of labour does the firm need to employ to achieve an output that minimizes average variable cost?

What is the sum of the marginal cost of all of the units produced?

What is average variable cost?

The graph below illustrates the average and marginal product of labour for Get Smart Enterprises. -Refer to the graph above to answer this question. How many units of labour does the firm need to employ to achieve economic capacity?

What is total variable cost?

-Refer to the graph above to answer this question. What is true at maximum total output?

-Refer to the graph above to answer this question. At what output does diminishing returns begin?

What is the term for the increase in total variable costs which results from the production of one more unit of output?