Chapter 14 Part 2

Total cost includes

• the cost of variable resources only.

• the cost of fixed resources only.

• the cost of both variable and fixed resources.

• the cost of neither variable nor fixed resources.

• all explicit costs and all the implicit costs that actually must be paid using money.

Chuck owns a factory that produces leather footballs. His total fixed cost equaled $86,000 last year. Hence Chuck's total cost equaled $286,000 last year. Hence Chuck's

• incurred an economic loss.

• total variable cost was zero.

• total variable cost equaled $200,000.

• total variable cost equaled $372,000.

• None of the above answers is correct.

The cost that does not change as output changes is

• total variable cost.

• total fixed cost.

• average fixed cost.

• marginal cost.

• average variable cost.

Marginal cost equals

• total variable cost divided by total output.

• the change in fixed cost that results from a one-unit increase in output.

• total cost minus total variable cost.

• the change in total cost that results from a one-unit increase in output.

• total fixed cost divided by total output.

The table above gives costs at Jan's Bike Shop. Unfortunately, Jan's record keeping has been spotty. Each worker is paid $100 a day. Labor costs are the only variable costs of production. What is the total cost of producing 50 bikes?

• $500

• $300

• $400

• $100

• $200

The table above gives costs at Jan's Bike Shop. Unfortunately, Jan's record keeping has been spotty. Each worker is paid $100 a day. Labor costs are the only variable costs of production. What is the total fixed cost of producing 64 bikes?

• $200

• $600

• $400

• $500

• $300

The table above gives costs at Jan's Bike Shop. Unfortunately, Jan's record keeping has been spotty. Each worker is paid $100 a day. Labor costs are the only variable costs of production. What is the total variable cost of producing 60 bikes?

• $200

• $500

• $400

• $300

• None of the above answers are correct.

Paulette owns a pizza parlor. Her total cost schedule is in the above table. Her total fixed cost is equal to

• $79.

• $35.

• $85.

• $20.

• Some amount, but more information is needed to determine her fixed cost.

Paulette owns a pizza parlor. Her total cost schedule is in the above table. Her marginal cost of producing the fifth pizza is:

• between $14.01 and $78.00

• $8

• between $8.01 and $10.00

• more than $78.01

• between $10.01 and $14.00

The figure shows the cost curves for Phil's Phone Repair, a cell phone repair firm. The figure shows marginal cost_____, which explains why __________.

• is decreasing up until 5 units; average total cost decreases

• is less than average total cost up until 12 units; average total cost decreases

• is greater than average total cost; average variable cost decreases

• is greater than average total cost when more than 12 phones are repaired; average total cost increases