Average variable cost:first tends to decrease, and then increase as output expands.remains unchanged as output expands.always increases as output increases.always decreases as output expands.

Average variable cost (AVC) is a firm's variable costs (labour, raw materials, electricity, etc.)…

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ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Similar questions

Minimum efficient scale for production of a good or service: Select correct one : a) is the point at which diseconomies of scale begin for a particular firm. b) is the point at which economies of scale begin for a particular firm. c) is the rate of output at which long-run average costs reach a minimum d) applies only to firms with U-shaped long-run average cost curves.
Economic cost can best be defined as Multiple Choice any contractual obligation that results in a flow of money expenditures from an enterprise to resource suppliers. any contractual obligation to labor or material suppliers. a payment that must be made to obtain and retain the services of a resource. all costs exclusive of payments to fixed factors of production.
Question 21 Average fixed cost decreases as quantity increases. True False
Fixed costs are associated with Multiple Choice highly adjustable inputs such as labor. both the short run and the long run. the short run only. the long run only.
As the firm's output increases in the short run, the average variable cost will: A) always increase B) always decrease C) always stay fixed D) have a U shape
Variable costs are Multiple Choice costs that remain to be paid even if the firm shuts down temporarily. costs that change every day or every month. costs that change with the level of production. changes in total cost due to the production of an additional unit of output.
A typical firm in industry X has the following total cost function: TC = 400 + 20*q + 0.25*q2, where q represents the units of output. (a) What is the marginal cost at output level q=34? (Round to one decimal place.) (b) What is the average cost at output level q=34? (Round to one decimal place.) (c) At this level of output (q=34) the firm faces (economies or diseconomies) of scale?
2) Indicate the type of cost which is not variable cost: a) Workers' wage. b) Material used in production. c) Accountant salary. d) Electricity consumed by the engine. 3) The relationship between price and demand can be expressed as a linear function. a) True b) False
Full explanations would be appreciated! 25) In a short-run production process, the marginal cost is rising and the average variable cost is falling as output is increased. Thus, A) marginal cost is below average fixed cost. C) average fixed cost is constant. B) marginal cost is below average variable cost. D) marginal cost is above average variable cost. 26) A firm employs 100 workers at a wage rate of $10 per hour, and 50 units of capital at a rate of $21 per hour. The marginal product of labor is 3, and the marginal product of capital is 5. The firm A) could reduce the cost of producing its current output level by employing more labor and less capital. B) could reduce the cost of producing its current output level by employing more capital and less labor. C) could increase its output at no extra cost by employing more capital and less labor. D) is producing its current output level at the minimum cost. E) Both B and D are true.
tc=1500+15q+6q^2+q^3 1=the total fix cost at 1000 and 500 units of output? 2=the total variable cost,average cost and marginal cost at 50 units of output.
Which statement must be false? a) When a firm has increasing returns to scale in production, its marginal cost curve will be downward sloping. b) When a firm has constant returns to scale, its total cost curve will be an upward sloping line. c) When a firm has diminishing returns to scale in production, its average cost curve will be upward sloping. d) Every firm faces eventually diminishing returns to scale, where its average cost curve reaches its minimum.
The fixed cost per unit is equal to: Multiple choice question. average variable cost. average total cost. average fixed cost. marginal cost.

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Average variable cost: first tends to decrease, and then increase as output expands. remains unchanged as output expands. always increases as output increases. always decreases as output expands.