21
68) If the marginal cost curve is below the average variable cost curve, then
A) average variable costs are increasing.
B) average variable costs are decreasing.
C) marginal cost must be decreasing.
D) average variable costs could either be increasing or decreasing.
Topic: Costs in the Short Run
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro–20
69) If the average variable cost curve is above the marginal cost curve, then
A) marginal costs must be decreasing.
B) average variable costs must be increasing.
C) marginal costs must be increasing.
D) marginal costs can be either increasing or decreasing.
Topic: Costs in the Short Run
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro–20
70) If marginal cost is between average variable cost and average total cost, then
A) both average variable cost and average total cost are increasing.
B) both average variable cost and average total cost are decreasing.
C) average variable cost is increasing and average total cost is decreasing.
D) average variable cost is decreasing and average total cost is increasing.
Topic: Costs in the Short Run
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro–20
71) The marginal cost curve intersects the average variable cost curve at the ________ value of the average
variable cost curve.
A) maximum
B) minimum
C) zero
D) average
Topic: Costs in the Short Run
Skill: Conceptual
AACSB: Reflective Thinking
Learning Outcome: Micro–20
22
72) Twenty-five students in a class take a test for which the average grade is 75. Then a twenty-sixth
student enters the class, takes the test, and scores 80. The test average calculated with 26 students will
A) rise above 75.
B) fall below 75.
C) change from 75 but the direction is unclear.
D) still equal 75.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-1
73) If a firm’s total costs are $80 when 10 units of output are produced and $90 when 11 units of output
are produced, the marginal cost of the 11th unit is
A) $1.
B) $5.
C) $8.09.
D) $10.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro–20
74) If a firm’s total costs are $100 when 10 units of output are produced and $103 when 11 units of output
are produced, the marginal cost of the 11th unit is
A) $1.
B) $3.
C) $5.
D) $9.36.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro–20
75) If the average variable cost of the fifth hat is $30, then the total variable cost of five hats is
A) $6.
B) $150.
C) $1800.
D) indeterminate from this information.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-12
23
Refer to the information provided in Figure 8.4 below to answer the question(s) that follow.
Figure 8.4
76) Refer to Figure 8.4. Micro Oven’s average fixed costs of producing two units of output are
A) $150.
B) $300.
C) $450.
D) indeterminate from this information.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro–12
77) Refer to Figure 8.4. If two microwave ovens are produced, Micro Oven‘s total variable costs are
A) $150.
B) $300.
C) $450.
D) indeterminate from this information.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro–12
24
78) Refer to Figure 8.4. If two microwave ovens are produced, average variable costs are
A) $75.
B) $150.
C) $225.
D) indeterminate from this information.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro–12
79) Refer to Figure 8.4. Micro Oven’s average fixed costs of producing three units of output are
A) $100.
B) $150.
C) $166.67.
D) indeterminate from this information.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro–12
80) Refer to Figure 8.4. If three microwave ovens are produced, Micro Oven’s total variable costs are
A) $150.
B) $200.
C) $300.
D) $500.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro–12
81) Refer to Figure 8.4. If three microwave ovens are produced, average variable costs are
A) $50.
B) $66.67.
C) $100.
D) indeterminate from this information.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro–12
25
82) Refer to Figure 8.4. The marginal cost of the third microwave oven is
A) $50.
B) $166.67.
C) $300.
D) indeterminate from this information.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro–20
83) Refer to Figure 8.4. Micro Oven’s average fixed costs of producing six units of output are
A) $41.66.
B) $50.
C) $100.
D) indeterminate from this information.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
84) Refer to Figure 8.4. If six microwave ovens are produced, Micro Oven’s total fixed costs are
A) $50.
B) $100.
C) $300.
D) indeterminate from this information.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
85) Refer to Figure 8.4. If six microwave ovens are produced, Micro Oven’s total variable costs are
A) $100.
B) $150.
C) $300.
D) $600.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
26
86) Refer to Figure 8.4.. If six microwave ovens are produced, average variable costs are
A) $50.
B) $100.
C) $150.
D) $300.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
87) Refer to Figure 8.4. If six microwave ovens are produced, Micro Oven’s average total costs are
A) $100.
B) $150.
C) $300.
D) indeterminate from this information.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
88) Refer to Figure 8.4. If six microwave ovens are produced, Micro Oven’s total costs are
A) $500.
B) $600.
C) $900.
D) indeterminate from this information.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
89) Refer to Figure 8.4. Micro Oven’s average fixed costs of producing nine units of output are
A) $25.
B) $33.33.
C) $55.55.
D) indeterminate from this information.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
27
90) Refer to Figure 8.4. Micro Oven’s average fixed costs of producing 10 units of output are
A) $30.
B) $40.
C) $50.
D) indeterminate from this information.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
91) Refer to Figure 8.4. Micro Oven’s average fixed costs of producing twelve units of output are
A) $41.67.
B) $25.00
C) $16.67.
D) indeterminate from this information.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
92) Refer to Figure 8.4. If twelve microwave ovens are produced, Micro Oven’s total fixed costs are
A) $25.
B) $41.67.
C) $50.
D) $66.67.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
93) Refer to Figure 8.4. If twelve microwave ovens are produced, Micro Oven’s total variable costs are
A) $300.
B) $500.
C) $800.
D) $1,300.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
28
94) Refer to Figure 8.4.. If twelve microwave ovens are produced, average variable costs are
A) $16.67.
B) $41.67.
C) $66.67.
D) $166.67.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
95) Refer to Figure 8.4. If twelve microwave ovens are produced, Micro Oven’s average total costs are
A) $25.
B) $41.67.
C) $50.
D) $66.67.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
96) Refer to Figure 8.4. If twelve microwave ovens are produced, Micro Oven’s total costs are
A) $300.
B) $500.
C) $800.
D) $1,300.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
97) Refer to Figure 8.4. The vertical distance AB represents
A) total fixed costs.
B) marginal costs.
C) average fixed costs.
D) average total costs.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
29
Refer to the short–run information provided in Figure 8.5 below to answer the question(s) that follow.
Figure 8.5
98) Refer to Figure 8.5. The total fixed costs for Blackstar Drones are
A) $0.
B) $50.
C) $150.
D) indeterminate from this information.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
99) Refer to Figure 8.5. If no drones are produced, total variable costs are
A) $0.
B) $25.
C) $50.
D) indeterminate from this information.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
30
100) Refer to Figure 8.5. If one drone is produced, total variable costs are
A) $30.
B) $40.
C) $50.
D) indeterminate from this information.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
101) Refer to Figure 8.5. If two drones are produced, total variable costs are
A) $25.
B) $30.
C) $50.
D) $80.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
102) Refer to Figure 8.5. If four drones are produced, total variable costs are
A) $17.50.
B) $20.
C) $70.
D) $120.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2
103) Refer to Figure 8.5. If six drones are produced, total variable costs are
A) $10.
B) $13.33.
C) $70.
D) $80.
Topic: Costs in the Short Run
Skill: Analytical
AACSB: Analytical Thinking
Learning Outcome: Micro-2