ECON 510 - CH.6 test

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

1 Marks: 1

Choose one answer.

a. MC < AC.

b. MC = AC.

c. the law of diminishing returns has not yet taken effect.

d. MC < AFC.

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

CorrectMarks for this submission: 1/1.

2 Marks: 1

Choose one answer.

a. average fixed costs are $2.

b. total costs are $10,800.

c. marginal costs are $8.

d. total variable costs are $8000.

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 conclude, with certainty, that the firm's:

IncorrectMarks for this submission: 0/1.

6th Assignment

Review of attempt 1

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Started on Sunday, May 22, 2011, 11:05 PMCompleted on Sunday, May 22, 2011, 11:41 PM

Time taken 35 mins 24 secsMarks 9/20Grade 2.25 out of a maximum of 5 (45%)

of 7ECON510-1900-SP11: 6th Assignment

5/22/2011http://moodle.unva.edu/moodle/mod/quiz/review.php?attempt=61343&showall=true

3 Marks: 1

Choose one answer.

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.

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


4 Marks: 1

Choose one answer.

a. AVC minus MC.

b. TC divided by Q.

c. TC minus TVC.

d. AC minus AVC.

Average fixed cost is


5 Marks: 1

Choose one answer.

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.

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


6 Marks: 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 change in ________ cost when output changes by one unit.



Choose one answer.

a. total; variable

b. variable; fixed

c. fixed; variable

d. total; fixed


7 Marks: 1

Choose one answer.

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.

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


8 Marks: 1

Choose one answer.

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.

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


9 Marks: 1

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

Incorrect



Choose one answer.

a. TC = TFC + TVC

b. TC = TFC when output = 0.

c. TVC = TFC - TC

d. TFC = TC - TVC

Marks for this submission: 0/1.

10 Marks: 1

Choose one answer.

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.

In the long run


11 Marks: 1

Choose one answer.

a. explicit and implicit costs.

b. implicit, but not explicit costs.

c. explicit, but not implicit costs.

d. neither explicit nor implicit costs.

To an economist, total costs include


12 Marks: 1

Choose one answer.

a. cost accounting data.

b. time-series regression analysis.

c. cross-sectional regression analysis.

d. None of the above

Long-run cost functions are estimated using




13 Marks: 1

Choose one answer.

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.

Which of the following statements is correct?


14 Marks: 1

Choose one answer.

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.

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


15 Marks: 1

Choose one answer.

a. sunk costs.

b. fixed costs.

c. variable costs.

d. opportunity costs.

Costs of production that change with the rate of output are


16 Marks: 1

a. its AC will increase.

When a firm experiences increasing returns to scale



Choose one answer.

b. its AFC will increase.

c. its AC will decrease.

d. its AFC will decrease.


17 Marks: 1

Choose one answer.

a. AFC = ATC - AVC

b. AVC = AFC + ATC

c. AFC = ATC + AVC

d. ATC = AFC - AVC

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


18 Marks: 1

Choose one answer.

a. greater than $50.

b. between $45 and $50.

c. $5.

d. Cannot be determined from the above information

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


19 Marks: 1

Choose one answer.

a. constant.

b. increasing.

c. decreasing.

d. cannot be determined without additional information.

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, marginal cost will be:




20 Marks: 1

Choose one answer.

a. wages for unskilled labor

b. fuel cost

c. expenditures for raw materials

d. property taxes

Which of the following is most likely a fixed cost?


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ECON510-1900-SP11



ECON 510 - CH.6 test

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