The four statements below describe properties of a firm's short run cost curves. Complete the statements using words from the list given below. • The increase in total cost from producing an additional unit of output is called • Average cost is the total cost of When a firm's average cost curve crosses the marginal cost curve, average costs are When a firm's average cost is greater than marginal cost, then producing an additional unit of output will result in a fall in average cost marginal cost at a minimum at a maximum production production divided by the quantity of units produced

The four statements below describe properties of a firm's short run cost curves. Complete the statements using words from the list given below. • The increase in total cost from producing an additional unit of output is called • Average cost is the total cost of When a firm's average cost curve crosses the marginal cost curve, average costs are When a firm's average cost is greater than marginal cost, then producing an additional unit of output will result in a fall in average cost marginal cost at a minimum at a maximum production production divided by the quantity of units produced

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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How does the impact of fixed costs change production decisions in the short run and in the long run? Use the average-total-cost (ATC) model in the photo to answer
22. What does the Long Run Average Cost curve depict? a) It depicts the relationship between Average (Total) Cost and quantity produced when at least one input is fixed b) It depicts the relationship between Average (Total) Cost and the scale of operation in the long run c) Both a) and b) are true d) Neither a) nor b) is true 24. Assume that you start your own business producing clay pots and hire workers to start production. The first worker produces 20 clay pots a day, and when your hire the second worker, total production increases to 48 clay pots a day. What is the marginal product of labour for the second worker? a) 20 b) 28 c) 68 d) 34
Explain the meaning of fixed costs. Provide a few examples of firms' costs that are likely to be fixed in the short run. Describe what the graphs of both total fixed cost and average fixed cost would look like. What is the relationship between Average Total Cost, Average Variable Cost, and Average Fixed Cost? What costs are fixed over the long run?
Provide a diagram that illustrates, for the short-run analysis, the average cost function, the marginal cost function, the average variable cost function and the variable cost function. Provide clear explanations for why these functions have common points of intersection.
Question 19 of 20 > (TC is total cost; VC is variable cost; Q is quantity.) ΔΤC . а. b. The amount by which total cost increases when an AQ additional unit is produced: Marginal cost Average (total) cost Average variable cost TC d. The total cost divided by the quantity of output: с. e. The change in total cost divided by the change VC f. in output: g. The sum of all costs that change as output changes divided by the number of units produced:
Calculate total costs at 4 units of output. Do not put a dollar sign in your answer. (The 6 columns are Quantity, Total Fixed Cost, Total Variable Cost, Total Cost, Average Total Cost, and Marginal Cost. The Quantity and Total Variable Cost columns have been filled in along with the first row for Total Fixed Cost. Average Total Costs and Marginal Costs are not calculated at a quantity of 0.) Quantity Total Fixed Cost Total Variable Cost Total Cost Average Total Cost Marginal Cost 0 15 0 XXXXX XXXXX 1 25 2 40 3 50 4 55 5 65 Calculate average total costs at 2 units of output. Calculate average total cost at 5 units of output. Calculate marginal cost at 4 units of output (moving from 3 units to 4 units). Can you tell if this is the short run or long run? Can you tell at which level of output profits will be maximized?
Classify the following milk bar short-run costs as fixed cost or variable cost Milk truck Fruit freezer Cost of milk sold each day ii) Assuming the following are the costs of your milk bar after the end of the second week answer the question below based on the following information. Fixed cost increased from 100 to 150 Variable cost increases from 220 to 300 Milk output increases from 450 to 620 a) What is the average total cost during the second week. Show your work b) What is the marginal cost. Show your work
Which of the following statements regarding a firm's long-run average total cost (LRATC) curve and its short-run average total cost (SRATC) curve is true? A) The contribution of average fixed cost to LRATC is greater than its contribution to SRATC. B) The shape of the LRATC is affected by the law of diminishing retums. O The LRATC shows the lowest cost at which a firm is able to produce a given level of output when no inputs are fixed. D) The SRATC, but not the LRATC, can be used by a firm's managers for planning.
Use the cost table below to find the following marginal costs. Output quantity Total variable Total fixed Total cost cost cost 20 80 60 140 40 140 60 200 60 210 60 270 80 300 60 360 100 420 60 480 120 600 60 660 140 840 60 900 What is the marginal cost when output is 20? $ What is the marginal cost when output is 80? $ What is the marginal cost when output is 120? $ |
The Santa Clara County increases the property taxes for all fast food restaurants. Which cost curves will be affected as a result of this policy? 1. average total cost and average fixed cost. 2. average variable cost and average total cost. 3. average variable cost and marginal cost. 4. average variable cost and average fixed cost.
Uncertain how to solve to get the correct answers
Fill in the blanks in the table below. The problem is a "puzzle" so the blanks are not necessarily filled in sequentially. (Hint: Determine the total fixed cost first.) Instructions: Enter your answers rounded to two decimal places. Total Average Fixed Cost Average Total Cost Marginal Cost Output Variable Total Cost Cost 1 $10.00 $9.76 $9.76 $19.76 2 $19.06 $14.53 $9.30 $29.06 3 $3.33 $12.63 $37.90 4 $2.50 $36.31 $11.58 $8.41 $46.31 $2.00 $44.30 $10.86 LO