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ECON 6100 Chapter 4: Extent How Much Decisions

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ECON 6100 Chapter 4: Extent How Much Decisions.1. If AVC=$5 and AFC=15, then AC= a. $15 b. $5 c. $20 d. $10 ANSWER: c TOPICS: Section 1: Background: Average and Marginal Costs ... 2. Total cost divided by the number of units produced is called: a. total cost b. average cost c. marginal cost d. variable cost ANSWER: b TOPICS: Section 1: Background: Average and Marginal Costs Use the following to answer questions 3-8: Number of Workers Total Cost 0 1000 1 2200 2 3200 3 4000 4 4600 5 5000 6 5200 7 5600 8 6200 9 7000 10 8000 3. The marginal cost of hiring the 7th worker is a. $0 b. $1,000 c. $400 d. $200 ANSWER: c TOPICS: Section 1: Background: Average and Marginal Costs 4. If the firm hires 8 workers, the total fixed costs is a. $600 b. $1,200 c. $1,000 d. $6,200 ANSWER: c TOPICS: Section 1: Background: Average and Marginal Costs 5. If hiring the 4th worker increases total product by 50 units and the price of each unit is $15, a. the firm should not hire the 4th worker as MR<MC b. the firm should not hire the 4th worker as MR<TC c. marginal revenue equals $150 d. the firm should hire the 4th worker as MR>MC ANSWER: d TOPICS: Section 1: Background: Average and Marginal Costs 6. If the firm hires 5 workers, the average cost equals a. $80 b. $1,000 c. Need more information d. $10 ANSWER: b TOPICS: Section 1: Background: Average and Marginal Costs 7. If the firms hires 5 workers and produces 5 units, the average variable costs equals a. $100 b. Need more information c. $800 d. $10 ANSWER: c TOPICS: Section 1: Background: Average and Marginal Costs 8. What is the average total cost of producing 7 units if you hire 7 workers? a. $1,200 b. $800 c. $400 d. $1,600 ANSWER: b TOPICS: Section 1: Background: Average and Marginal Costs 9. A firm produces 500 units per week. It hires 20 full-time workers (40 hours/week) at an hourly wage of $15. Raw materials are ordered weekly and they costs $10 for every unit produced. The weekly cost of the rent payment for the factory is $2,250. How do the overall costs breakdown? a. total variable cost is $17,000; total fixed cost is $2,250; total cost is $19,250 b. total variable cost is $5,000; total fixed cost is $2,250; total cost is $7,250 c. total variable cost is $5,000; total fixed cost is $14,250; total cost is $19.250 d. total variable cost is $12,000; total fixed cost is $7,250; total cost is $19,250 ANSWER: a TOPICS: Section 1: Background: Average and Marginal Costs 10. If AVC=$15 and AFC=$10, then ATC= a. $25 b. $5 c. $15 d. $10 ANSWER: a TOPICS: Section 1: Background: Average and Marginal Costs 11. If a firm produces 10 units, TC=$100. When the firm increase its output to 15 units, TC= $150. The firm’s variable costs equal to a. $50 b. $150 c. $25 d. $100 ANSWER: b TOPICS: Section 1: Background: Average and Marginal Costs [Show More]

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