Exam 41: Supply: the Costs of Doing Business

The table given below shows the total cost of producing different units of the output by a competitive firm. Table 21.4 Which of the following is correct if the firm described in Table 21.4 decides to produce nothing?

When average total cost is minimum, it is:

In the short run when output is zero, total cost is:

As the confectionary, Mrs.Fields' Cookies, gained popularity in California and decided to expand its operations to Utah, it was able to achieve economies of scale.This means that:

If an average cost curve is U-shaped, then:

The phrase "to spread the overhead" refers to reducing the cost that are not directly attributable to the production process.

If a firm experiences constant returns to scale throughout:

Marginal cost equals:

When the marginal-cost curve lies above the average-total-cost curve, the average-total-cost curve slopes up and the average-variable-cost curve slopes down.

Overhead costs are identical to fixed costs.

Diminishing marginal returns means that as you combine more units of a variable resource with a set of fixed resources:

The table given below shows the total cost of producing different units of the output by a competitive firm. Table 21.4 In Table 21.4, at 4 units of output marginal cost is:

The table below shows the total cost of producing different units of a commodity. Table 21.2 From Table 21.2, derive the value of total fixed costs.

The long-run average-total-cost curve is U-shaped because:

If short-run average total costs are rising in the oil tanker industry, it implies that economies of scale exist in that industry.

If a firm doubles its resources and generates an output level which is more than double, it is said to be experiencing:

The difference between average total cost and average variable cost decreases with an increase in output.

The table given below shows the total fixed and variable costs of a firm. Table 21.3 In Table 21.3, the average fixed cost of the first unit of output is ____ while the average fixed cost of producing 8 units of output is ____.

Economies of scale exist when the long-run average-total-cost curve is positively sloped.

If the average total cost of producing 2 pounds of cheese is $4 and the average total cost of producing 3 pounds of cheese is $4.2, then the marginal cost of producing third pound of cheese is equal to: