Economics(Production & Costs)

The following graph illustrates

• The Law of Increasing Costs
• The Law of Demand
• Circular Flow Diagram of  Mixed Economy
• The Marginal Product of Labor

Which of the following statement is NOT true of variable cost?

• Total variable cost is zero when output is zero.
• Variable cost is paid for the use of variable factors.
• Total variable cost rises with a constant slope as output rises.
• Total cost rises as output rises.

To produce a given level of output at least cost, a firm should buy inputs until

• marginal cost equals total cost

• marginal product per pound spent on each input are the same

• all costs fall to the barest minimum

• none of the above

• they get the same "bang for your buck" from each input.

In the short run, when factors such as capital are fixed, variable factors tend to show an initial phase of increasing marginal product followed by diminishing marginal product. The corresponding cost curves show an initial phase of declining marginal costs, followed by increasing MC after diminishing returns have set in.

• False

• It depends

• True

• Contradictory

The AC curve is always pierced at its minimum

point by a rising MC curve

• by a rising MC curve

• by a falling MC curve

• by a constant average variable curve

• None of the above

When MC > AC, it is

• pulling down AC

• none of the above

• pulling up AC

• MRS will have a U-shaped curve

When marginal cost is below average cost..

• average cost will be rising

• average cost will be falling

• marginal cost will be negative

• average cost will be the same as maginal cost

Which of the following is not a variable cost of owning a vehicle?

• Gas
• Oil Change
• Vehicle Registration
• Air filters

Whay are the average total, average variblae, and marginal cost curves U shaped?

• They show the products increasing and decreasing quanitty in a market based on the laws of demand
• They show increasing marginal returns for small quantities of output  followed by decreasing marginal returns for larger quantities of output 
• They demonstrate the relationship between creating and buying with in a monopolistic market
• All of the above answer choices

Total Revenue – (Explicit + Implicit Costs)=?
What is this the equation for?

• Total Cost
• Economic Profit
• Normal Profit
• Marginal Profit