NAME E INT LAST NAME, FIRST NAME PRINT LAST NAME, FIRST NAME SECTIONa THE COSTS
ID: 1193929 • Letter: N
Question
NAME E INT LAST NAME, FIRST NAME PRINT LAST NAME, FIRST NAME SECTIONa THE COSTS OF PRODUCTION be paid in the short run even when no Costs that must be paid in a. total short run even when no output is produced are called total costs (TC) 1 atotal fixed costs (TFC). eotal yari abae sosts TVC) marginal costs (MC). ucing 30 units of output has average total cost equal to $12 and average A firm producing 30 units of A firm produ cqual to $8. This firm's total fixed costs are therefore equal to: variable cost equal to $8. This S4. b. $120. c. $240. d. $360. formation below to answer questions 3 and 4. Use the information belo otal cost (ATC) of producing a bell is $5 when Jenny's Jingles produces 100 bells. 1 n when zero bells are produced is $250. Total cost when zero bells are The total variable $250 otal variable costTVCof producing 100 bells is equal to: a. $250 b. $500. c. $750 d. $1,000 Average fixed cost (AFC) when 100 bells are produced is equal to: a. $2.50 b. $5.00 c. $7.50. d. $25.00. $2.50. Suppose through 10 games Dirk Nowitzki scored, on average, 25 points per game. If in his 11th game he scored 21 points, we know that his: a. marginal score is greater than his average score, and his season average will fall. b. marginal score is greater than his average score, and his season average will rise. c. marginal score is less than his average score, and his season average will fall. d. marginal score is less than his average score, and his season average will rise. 6. Suppose the total cost of production in the short run is $500,000 when 2,000,000 units are produced. Then, average total cost (ATC) is: a. 25 cents per unit and average fixed cost (AFC) is 15 cents per unit. b. c. $4 per unit, and average fixed cost (AFC) is $2 per unit. 25 cents per unit, and average fixed cost (AFC) is unknown given the available information S4 per unit,and average fixed cost (AFC) is unknown given the available information d. $
Explanation / Answer
1.ans Total fixed cost
2. output= 30 , AC=12, AVC=8
AC=TC/Q and AVC=VC/Q
AC=TC/Q this means 12=TC/30 , TC=360 and AVC=VC/Q this means 8=VC/30, VC=240
now, we know that TC=FC+VC this implies that 360= FC+240 , FC= 120 (ans b)
3. total cost when 0 bells are produced = 250, it means FC= 250.Npw AC when 100 bells are produced = 5, and we know that TC =AC. Q = 5.100=500
TC=FC+VC
500=250+VC, VC=250( ans A)
4. AFC=FC/Q= 250/100= 2.50(ans a)
5. (A) is the answer
6.ans(C) . AC= TC/ output = 500,000/2,000,000=0.25 . we cannot calculate FC or Afc because the above data is insufficient
7. ans(C). FC= 2000 and when output is 100 AFC will be equal to 2000/100=20.20 is the right answer
8.ans(b). At output = 400 TC=340 and FC= 70 . As we know that TC= FC+VC
340=70+VC this implies that VC=270 and AVC=VC/Q= 270/400=0.675
9. ans (C). MC= 130(470-340) ,at each unit =130/100 ( 500-400=100)= 1.30
10.ans(D). fixed cost remains same no matter what is the level of output . AFC=FC/Q=70/500=0.14
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