Choose the correct answer of the following Which of the following is a variable cost?

Answer each question of the following parts (100 Marks)
Part 1.Choose the correct answer of the
following: (40
Marks)
1-
Which of the following is a variable cost?
A-
Interest payments
B-
Raw materials costs
C-
Property taxes
D-
All of the above are variable
costs
2-
Which of the following is an implicit cost?
A-
The salary earned by a
corporate executive
B-
Depreciation in the value of a
company-owned car as it wears out
C-
Property taxes
D-
All of the above are implicit costs
3-
Short-run average variable cost is equal to
A-
Total variable cost divided by
output.
B-
Average total cost minus
average fixed cost.
C-
The cost per unit of the
variable input divided by the average product of the variable input.
D-
All of the above.
4-
Which of the following short-run cost curves declines
continuously?
A-
Average total cost
B-
Marginal cost
C-
Average fixed cost
D-
Average variable cost
5-
The long-run average cost curve is at a minimum at a level of
output where
A-
The firm is experiencing
constant returns to scale.
B-
It is equal to long-run
marginal cost.
C-
The long-run average cost curve
is tangent to the lowest point on a short-run average total cost curve.
D-
All of the above occur.
6-
Economic profit is equal to
A-
Total revenue minus the opportunity
cost of producing goods and services.
B-
Total revenue minus the
accounting cost of producing goods and services.
C-
Total revenue minus the
explicit cost of producing goods and services.
D-
Average revenue minus the
average cost of producing the last unit of a good or service
7-
A production function is a relationship between
A-
Inputs and revenue.
B-
Inputs and costs.
C-
Inputs and profit.
D-
Inputs and quantity of output.
8-
The marginal product of labor is equal to the
A-
Increase in labor necessary to
generate a one-unit increase in output.
B-
Increase in output obtained
from a one-unit increase in labor.
C-
Incremental profit associated
with a one-unit increase in labor.
D-
Incremental cost associated
with a one-unit increase in labor.
9-
The slope of a production function (or total product curve)
reveals information about the
A-
Average product of workers.
B-
Marginal product of workers.
C-
Total product of workers.
D-
Fixed product of workers.
10- Which of the
following costs do not vary with the amount of output a firm produces?
A-
Marginal costs and average
fixed costs
B-
Total fixed costs
C-
Average fixed costs
D-
Total fixed costs and average
fixed costs
11- If marginal cost
is rising
A-
Marginal product must be
rising.
B-
Marginal product must be
falling.
C-
Average variable cost must be
falling.
D-
Average fixed cost must be
rising.
12- The efficient
scale of the firm is the quantity of output that
A-
Maximizes marginal product.
B-
Minimizes average total cost.
C-
Minimizes average fixed cost.
D-
Minimizes average variable
cost.
13- When marginal
cost is less than average total cost,
A-
Marginal cost must be falling.
B-
Average total cost is falling.
C-
Average total cost is rising.
D-
Average variable cost must be
falling.
14- Marginal cost is
equal to average total cost when
A-
Marginal cost is at its
minimum.
B-
Average total cost is at its
minimum.
C-
Average variable cost is
falling.
D-
Average fixed cost is rising.

Part 2. The following data
in the table below represents the relationship between the number of workers
and their outputs in a company for a given day: (58 Marks)

Workers

Output
Q

Marginal Product
MP

Variable Cost
VC

Average Variable Cost
AVC

Fixed Cost
FC

Average Fixed Cost
AFC

Total Cost
TC

Average Total Cost
ATC

Marginal Cost
MC

0

0

0

1

12

1

2

20

3

3

26

9

4

29

29

5

31

70

6

32

135

1-
Fill in the column of marginal
products. What pattern do you see? How might you explain it? (use a graph)
2-
The firm has fixed cost of
$150. Use this information to fill in the column for total cost. (use a graph)
3-
Fill in the column for average
variable cost, average fixed cost and average total cost. What pattern do you
see for all? Explain why. (use a graph)
4-
Fill in the column for marginal
cost. What pattern do you see?
5-
Compare the data in the two
columns of marginal cost and marginal product. Explain the relationship between
both of them. (use a graph)
6-
Compare the data in the two
columns of marginal cost and average variable cost. Explain the relationship
between both of them. What is the amount of output at efficient scale? (use a
graph)

Good Luck

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