Exam 41: Supply: the Costs of Doing Business

In the electricity generation industry, the cost per kilowatt hour of electricity declines as the capacity to generate output increases.This situation represents:

When more and more doses of fertilizers are added to a fixed plot of agricultural land, the crop yield initially declines but eventually rises.

Which of the following is not correct?

The figure given below shows the average fixed cost (AFC)and the average variable cost (AVC)curves of a competive firm. Figure 21.1 Using Figure 21.1 determine the average total cost of producing the first unit of the output.

In the long run, total cost is equal to total fixed cost at an output of zero.

Fixed costs are costs paid for:

When a firm is experiencing economies of scale, it will:

When a firm grows to such an extent that it is unable to coordinate between its employees properly it is likely to experience economies of scale.

The figure given below shows cost curves of a firm. Figure: 21.2 In the figure, |: Marginal cost curve ||: Average total cost curve |||: Average variable cost curve Refer to Figure 21.2.When Average Variable Cost (AVC)is at a minimum, which of the following is true?

In the long run, the producer can change the entire plant size to produce a certain level of the output.

The table given below shows the total fixed and variable costs of a firm. Table 21.3 Using the information in Table 21.3 we can conclude that the marginal-cost curve intersects the average-variable-cost curve at ____ unit(s)of output.

Which of the following reflects the correct relationship between average total cost (ATC)and marginal cost (MC)?

Suppose that for 20 bicycles, the total fixed cost is $100 and total variable cost is $300.Then the average fixed cost and average variable cost are:

The long-run average-total- cost curve represents:

Which of the following statements is true?

When more and more units of a variable factor are combined with constant amount of fixed factor, such that the variable factor becomes abundant compared to the fixed factor, the output will eventually:

The following table shows the cost of producing different units of ball point pens by a firm. Table 21.1 According to Table 21.1, the average variable cost of producing five ball point pens is:

The table given below shows the total fixed and variable costs of a firm. Table 21.3 If the firm described in Table 21.3 decides to produce nothing, which of the following would be true?

The figure given below shows cost curves of a firm. Figure: 21.2 In the figure, |: Marginal cost curve ||: Average total cost curve |||: Average variable cost curve Refer to Figure 21.2.At an output level of H, average total cost is:

Which of the following may lead to diseconomies of scale?