9-61
Test Bank: I
Topic: Short-Run Production Costs
113.
Because the marginal product of a variable resource at first increases and then decreases as
the output of the firm is increased,
114.
Suppose that, when producing 10 units of output, a firm’s AVC is $22, its AFC is $5, and its
MC is $30. This firm’s
115.
In comparing the changes in TC and TVC associated with an additional unit of output, we
find that
9-62
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written consent of McGraw-Hill Education.
A.
the change in TVC is equal to MC, while the change in TC is equal to TFC.
B.
the change in TC exceeds the change in TVC.
C.
the change in TVC exceeds the change in TC.
D. both TC and TVC changes are equal to MC.
116.
Answer the question on the basis of the following cost data.
Output
Average Fixed Cost
Average Variable Cost
1
$50.00
$100.00
2
25.00
80.00
3
16.67
66.67
4
12.50
65.00
5
10.00
68.00
6
8.37
73.33
7
7.14
80.00
8
6.25
87.50
Total fixed cost is
9-63
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written consent of McGraw-Hill Education.
Type: Table
117.
Answer the question on the basis of the following cost data.
Output
Average Fixed Cost
Average Variable Cost
1
$50.00
$100.00
2
25.00
80.00
3
16.67
66.67
4
12.50
65.00
5
10.00
68.00
6
8.37
73.33
7
7.14
80.00
8
6.25
87.50
The average total cost of five units of output is
118.
Answer the question on the basis of the following cost data.
Output
Average Fixed Cost
Average Variable Cost
1
$50.00
$100.00
2
25.00
80.00
3
16.67
66.67
4
12.50
65.00
5
10.00
68.00
6
8.37
73.33
7
7.14
80.00
8
6.25
87.50
The total cost of four units of output is
119.
Answer the question on the basis of the following cost data.
Output
Average Fixed Cost
Average Variable Cost
1
$50.00
$100.00
2
25.00
80.00
3
16.67
66.67
4
12.50
65.00
5
10.00
68.00
6
8.37
73.33
7
7.14
80.00
8
6.25
87.50
If the firm closed down in the short run and produced zero units of output, its total cost would be
9-65
120.
Answer the question on the basis of the following cost data.
Output
Average Fixed Cost
Average Variable Cost
1
$50.00
$100.00
2
25.00
80.00
3
16.67
66.67
4
12.50
65.00
5
10.00
68.00
6
8.37
73.33
7
7.14
80.00
8
6.25
87.50
The marginal cost of the fifth unit of output is
121.
Answer the question on the basis of the following cost data.
Output
Average Fixed Cost
Average Variable Cost
1
$50.00
$100.00
2
25.00
80.00
3
16.67
66.67
4
12.50
65.00
5
10.00
68.00
6
8.37
73.33
7
7.14
80.00
8
6.25
87.50
The marginal cost curve would intersect the average variable cost curve at about
122.
Other things equal, if the wage rates paid to a firm’s labor inputs were to rise, we would
expect the
9-67
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written consent of McGraw-Hill Education.
Topic: Short-Run Production Costs
123. If a technological advance increases a firm’s labor productivity, we would expect its
124. Assume a firm closes down in the short run and produces no output. Under these
conditions,
125.
If marginal cost is
126.
If the total variable cost of 9 units of output is $90 and the total variable cost of 10 units of
output is $120, then
127. The short-run average total cost curve is U-shaped because
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written consent of McGraw-Hill Education.
Topic: Short-Run Production Relationships
128.
The Sunshine Corporation finds that its costs are $40 when it produces no output. Its
total variable costs (TVC) change with output as shown in the accompanying table. Use
this information to
answer the following question.
Output
TVC
1
$30
2
50
3
65
4
85
5
110
The total cost of producing 3 units of output is
129.
The Sunshine Corporation finds that its costs are $40 when it produces no output. Its
total variable costs (TVC) change with output as shown in the accompanying table. Use
this information to answer the following question.
Output
TVC
1
$30
2
50
3
65
4
85
5
110
The average total cost of 3 units of output is
130.
The Sunshine Corporation finds that its costs are $40 when it produces no output. Its
total variable costs (TVC) change with output as shown in the accompanying table. Use
this information to
answer the following question.
Output
TVC
1
$30
2
50
3
65
4
85
5
110
The average fixed cost of 3 units of output is
9-71
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written consent of McGraw-Hill Education.
Test Bank: I
Topic: Short-Run Production Costs
Type: Table
131.
The Sunshine Corporation finds that its costs are $40 when it produces no output. Its
total variable costs (TVC) change with output as shown in the accompanying table. Use
this information to answer the following question.
Output
TVC
1
$30
2
50
3
65
4
85
5
110
The marginal cost of the third unit of output is
132.
Refer to the diagram. This firm’s average fixed costs
133.
Refer to the diagram. If labor is the only variable input, the marginal product of labor is at a
134.
Refer to the diagram. If labor is the only variable input, the average product of labor is at a
9-75
135.
Refer to the diagram. The profit-maximizing level of output for this firm
136.
Answer the question on the basis of the accompanying table that shows average total costs
(ATC) for a manufacturing firm whose total fixed costs are $10.
Output
ATC
1
$40
2
27
3
29
4
31
5
38
The total cost of producing 4 units of output is
137.
Answer the question on the basis of the accompanying table that shows average total
costs (ATC) for a manufacturing firm whose total fixed costs are $10.
Output
ATC
1
$40
2
27
3
29
4
31
5
38
The average variable cost of 4 units of output is
9-77
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written consent of McGraw-Hill Education.
AACSB: Knowledge Application
Blooms: Understand
Diff ic ulty: 02 Medium
Learning Objective: 09–03 Describe the distinctions between fixed and variable costs and
among total, average, and marginal costs.
Test Bank: I
Topic: Short-Run Production Costs
Type: Table
138.
Answer the question on the basis of the accompanying table that shows average total costs
(ATC) for a manufacturing firm whose total fixed costs are $10.
Output
ATC
1
$40
2
27
3
29
4
31
5
38
The marginal cost of the fourth unit of output is
139.
Answer the question on the basis of the accompanying table that shows average total costs
(ATC) for a manufacturing firm whose total fixed costs are $10.
Output
ATC
1
$40
9-78
2
27
3
29
4
31
5
38
The profit-maximizing level of output for this firm
140.
Refer to the graph. Which one of the following would cause a move from point b to point c along
short-run average total cost curve ATC1?
141.
Refer to the graph. Which one of the following would cause a move from point d to point e along
short-run average total cost curve ATC2?
142.
Refer to the graph. Which one of the following would cause a move from point b on short-run
average total cost curve ATC1 to point e on short-run average cost curve ATC2?