Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Question
Chapter 14, Problem 7MCQ
To determine
Choose the correct answer from the following options: When
- Equals average product
- Exceeds average product
- Is less than average product
- Is at its maximum level
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Students have asked these similar questions
A company is planning to manufacture mountain bikes.
Fixed monthly cost will be $100,000 and it will cost $100 to
produce each bicycle.
a. Write the cost function, C, of producing x mountain
bikes.
b. Write the average cost function, C, of producing
x mountain bikes.
c. How many mountain bikes must be produced each
month for the company to have an average cost of $300
per bike?
A firm’s marginal product will be at a maximum at which of the following levels of output?
A
less than the quantity where average cost is a minimum.
B
greater than the quantity where marginal cost is a minimum.
C
greater than the quantity where average cost is a minimum.
D
less than the quantity where marginal cost is a minimum.
Mboth the marginal cost and the average variable cost curves are U-shaped, at the
minimum point of the average variable cost curve, the marginal cost curve must be
greater than average total cost.
less than average total cost.
equal to averagn total cost.
at its minimum.
Chapter 14 Solutions
Foundations of Economics (8th Edition)
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Similar questions
- what is meant by the term Cost of production? Distinguish between fixed and variable cost. Why short run average cost and marginal cost curve generally U-Shaped?arrow_forwardThe difference between variable cost and fixed cost is that Select one: a. fixed cost is paid even when there is no output b. fixed cost is always falling as output increases c variable cost only increases for a while and then it decreases d. fixed cost is always less than variable cost e. fixed cost is not paid once production beginsarrow_forwardAverage total cost, average variable cost marginal cost and marginal product b. The relationship between marginal product and marginal cost is reciprocal or opposite. Why is it so? Explain.arrow_forward
- Fill in the blanks with: (a: rising) (b: at a minimum) (c: at a maximum) (d: falling) (e: constant) 1: When marginal cost is less than average variable cost, average variable cost is: 2 When marginal product is greater than average product, average variable cost is: 3: When marginal product is negative, total product is: 4: As total output increases average fixed cost is: 5: When marginal cost is at a minimum average product is:arrow_forwardDefine economies of scale and explain why they might arise. Define diseconomies of scale and explain why they might arise. Explain the relationship between total product, marginal product, and average product. How does fixed cost affect marginal cost? Why is this relationship important?arrow_forwardComment on the relationships of Total, Marginal and Average Productarrow_forward
- The difference between variable cost and fixed cost is that Select one: a. fixed cost is paid even when there is no outout b. fixed cost is always falling as output increases C. variable cost only increases for a while and then it decreases d. fixed cost is always less than variable costarrow_forwardRefer to Exhibit 21-4. Curve D is a(n) a. average total b. marginal c. average fixed d. average variable Cost O cost curve. Exhibit 21-4 A D Quantity of Outputarrow_forwardAverage total cost, average variable cost marginal cost and marginal product a. Why is the gap or difference between average total cost and average variable cost larger at initial level of production ction and then the gap is decreasing as output increases? Explain.arrow_forward
- a software production firm, average product has started falling and total output indicated diminishing trend. The production manager Mr. Yahya called you and asked you to see the condition of marginal product. You analyzed the situation and reported that marginal product falling more than average product. Mr. Yahya got surprised. In your opinion which situation the firm is heading to?arrow_forwardA cost that changes with the level of production is called a(n)____cost a.variable b.average total c.marginal b.fixedarrow_forwardWhat is a production function? Response option group It is the production technology It is the relationship between inputs and the level of production It is the average product It is the marginal productarrow_forward
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