ECON510-1900-SP11: 6th Assignment

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ECON510-1900-Managerial Economics-SP11-KIM You are logged in as Dhruv Dholakiya (Logout)

UNVA-Online► ECON510-1900-SP11► Quizzes► 6th Assignment► Review of attempt 1

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Sunday, May 22, 2011, 11:05 PM Sunday, May 22, 2011, 11:41 PM 35 mins 24 secs 9/20 2.25 out of a maximum of 5 (45%)

When a firm increased its output by one unit, its AC decreased. This implies that Marks: 1

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a. MC < AC. b. MC = AC. c. the law of diminishing returns has not yet taken effect. d. MC < AFC.

Correct Marks for this submission: 1/1.

Assume a firm is currently producing 100 units of output, total fixed costs are \$10,000, and average variable costs are \$8. Based on this information we can Marks: 1 conclude, with certainty, that the firm's:

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a. average fixed costs are \$2. b. total costs are \$10,800. c. marginal costs are \$8. d. total variable costs are \$8000.

Incorrect Marks for this submission: 0/1.

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ECON510-1900-SP11: 6th Assignment

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Which of the following is true of the relationship between the marginal cost function and the average total cost and average variable cost functions? Marks: 1

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a. The ATC and AVC curves intersect the MC curve at minimum MC. b. If MC is greater than ATC and AVC, then ATC and AVC will increase. c. At each level of output, MC is equal to difference between AVC and ATC. d. The MC curve, ATC curve, and AVC curve all intersect at the same point.

Incorrect Marks for this submission: 0/1.

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Average fixed cost is

Marks: 1

a. AVC minus MC. b. TC divided by Q. c. TC minus TVC. d. AC minus AVC.

Incorrect Marks for this submission: 0/1.

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If total cost equals \$2,000 and quantity produced is 100 units, then

Marks: 1

a. fixed cost is \$200 and average variable cost is \$18. b. fixed cost is \$600 and average variable cost is \$14. c. fixed cost is \$500 and marginal cost is \$15. d. Either A or B can be correct.

Correct Marks for this submission: 1/1.

Marginal cost is defined as the change in ________ cost when output changes by one unit. In the short run, marginal cost can also be measured by the Marks: 1 change in ________ cost when output changes by one unit.

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ECON510-1900-SP11: 6th Assignment

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a. total; variable b. variable; fixed c. fixed; variable d. total; fixed

Incorrect Marks for this submission: 0/1.

Production functions A and B result in the same average total costs of production. However, production function A is twice as capital intensive as Marks: 1 production function B. In this case, all else constant:

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a. marginal costs will be higher in B than they will in A. b. because total costs are equal, marginal costs will be equal for the two production functions as well. c. marginal costs will be higher in A than they are in B. d. there is no way to say anything about the relative marginal costs of production in the two production functions without additional information.

Correct Marks for this submission: 1/1.

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Which of the following is the best example of economies of scope?

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a. A company reduces its cost by getting bigger discounts for bulk purchases. b. Coca-Cola expands its global operations to sub-Sahara Africa. c. Alcohol for car fuel is produced from corn. d. Amazon.com decides to rent out its Web site to independent e-commerce companies.

Correct Marks for this submission: 1/1.

Which of the following statements concerning the relationships among the firm's total cost functions is false? Marks: 1

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Incorrect

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ECON510-1900-SP11: 6th Assignment

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a. TC = TFC + TVC b. TC = TFC when output = 0. c. TVC = TFC - TC d. TFC = TC - TVC

Marks for this submission: 0/1.

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In the long run

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a. all costs are fixed costs. b. fixed costs tend to be greater than variable costs. c. all costs are variable costs. d. variable costs tend to be greater than fixed costs.

Correct Marks for this submission: 1/1.

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To an economist, total costs include

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a. explicit and implicit costs. b. implicit, but not explicit costs. c. explicit, but not implicit costs. d. neither explicit nor implicit costs.

Correct Marks for this submission: 1/1.

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Long-run cost functions are estimated using

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a. cost accounting data. b. time-series regression analysis. c. cross-sectional regression analysis. d. None of the above

Incorrect Marks for this submission: 0/1.

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ECON510-1900-SP11: 6th Assignment

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Which of the following statements is correct?

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a. In the short run, if a firm chooses to produce no output (i.e., shut down) its total costs of production will equal its total fixed costs. b. A firm minimizes its total costs of production when average variable cost is minimized. c. If a firm decides to shut down, its short-run total costs will equal 0. d. As a firm increases output in the short run, the change in total costs is equal to the change in total variable costs.

Incorrect Marks for this submission: 0/1.

The law of diminishing returns begins first to affect a firm's short-run cost structure when Marks: 1

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a. average fixed cost begins to decrease. b. marginal cost begins to increase. c. average variable cost begins to increase. d. average cost begins to increase.

Correct Marks for this submission: 1/1.

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Costs of production that change with the rate of output are

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a. sunk costs. b. fixed costs. c. variable costs. d. opportunity costs.

Correct Marks for this submission: 1/1.

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When a firm experiences increasing returns to scale

Marks: 1

a. its AC will increase.

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ECON510-1900-SP11: 6th Assignment

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b. its AFC will increase. c. its AC will decrease. d. its AFC will decrease.

Correct Marks for this submission: 1/1.

Which of the following statements is true of the relationship among the average cost functions? Marks: 1

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a. AFC = ATC - AVC b. AVC = AFC + ATC c. AFC = ATC + AVC d. ATC = AFC - AVC

Incorrect Marks for this submission: 0/1.

When a firm increased its output by one unit, its AC rose from \$45 to \$50. This implies that its MC is Marks: 1

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a. greater than \$50. b. between \$45 and \$50. c. \$5. d. Cannot be determined from the above information

Incorrect Marks for this submission: 0/1.

For a particular production function, over the range of output where marginal product rises as units of the variable input are added to the fixed input, Marks: 1 marginal cost will be:

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a. constant. b. increasing. c. decreasing. d. cannot be determined without additional information.

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ECON510-1900-SP11: 6th Assignment

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Incorrect Marks for this submission: 0/1.

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Which of the following is most likely a fixed cost?

Marks: 1

a. wages for unskilled labor b. fuel cost c. expenditures for raw materials d. property taxes

Incorrect Marks for this submission: 0/1.

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ECON510-1900-SP11

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ECON 510 - CH.6 test

Choose one answer. Choose one answer. Assume a firm is currently producing 100 units of output, total fixed costs are \$10,000, and average v...