(7.3-6; 7.3-7; 7.3-8; 7.3-9; 7.3-10)-A. Smith

Question 1

A guide for how much to produce is?

Answer 1

marginal cost

Question 2

The cost of labor per unit of output produced

is ___________.

Answer 2

average cost

Question 3

What does AVC stand for?

Answer 3

average cost variable

Question 4

AVC = ?

Answer 4

VC(total variable cost) / TP (total output)

Question 5

Does marginal cost and average variable cost

the same concept?

Answer 5

no

Question 6

What two things are substantial in finding the

average variable cost?

Answer 6

total variable cost and total output

Question 7

Do we, as economists, multiply or divide

variable cost and total product to get the average variable cost?

Answer 7

divide

Question 8

What is AVC good for?

Answer 8

to see if one would make a profit or not

Question 9

Does AVC vary when we change amount of

output?

Answer 9

yes

Question 10

When does AVC change?

Answer 10

When the productivity changes

Question 11

Productivity and cost are ________ related.

Answer 11

inversely

Question 12

As price increases, cost _________.

Answer 12

decreases

Question 13

Marginals and averages always have the

same relationships. True or False

Answer 13

True

Question 14

When marginal increases, average ________.

Answer 14

increases

Question 15

When marginal decreases, average

__________.

Answer 15

decreases

Question 16

What is the slope of the variable cost curve.

Answer 16

Marginal cost

Question 17

The AVC curve is at a __________ when it intersects with the MC curve.

Answer 17

minimum

Question 18

When MC is above AVC, it pulls the

average ________

Answer 18

up

Question 19

When MC is below AVC, it pulls the average

__________

Answer 19

down

Question 20

Minimum slope = __________ AVC

Answer 20

minimum

Question 21

Marginal cost is _________ related to

marginal product.

Answer 21

inversely

Question 22

AVC is ________ related to average product.

Answer 22

inversely

Question 23

What is the definition of slop?

Answer 23

rise over run

Question 24

the curves of MC and AVC are ________

_______ to the curves of MP and AP.

Answer 24

mirror images

Question 25

What is on the x-axis on the MC and AVC graph?

Answer 25

TP (output)

Question 26

Define Short run:

Answer 26

brief period of time that is so short that at | least one input is fixed

Question 27

Fixed input costs that are constant

Answer 27

fixed cost

Question 28

The more sets you _______, the more thinly | you can spread your fixed costs out

Answer 28

produce

Question 29

The more you produce, the more your fixed | costs _______

Answer 29

shrinks

Question 30

What is AFC?

Answer 30

average fixed cost

Question 31

Fixed cost per unit of output produced

Answer 31

Average fixed cost

Question 32

What two things deal with average fixed cost?

Answer 32

total fixed cost and total output

Question 33

As TP increases, AFC ________.

Answer 33

decreases

Question 34

AFC + AVC = ?

Answer 34

ATC

Question 35

What is ATC?

Answer 35

Average total cost of production

Question 36

We us _________ addition to get ATC.

Answer 36

vertical

Question 37

Average total cost =

Answer 37

total cost / quantity produced

Question 38

ATC is the sum of what two things?

Answer 38

variable cost and fixed cost

Question 39

What is the equation of ATC?

Answer 39

ATC = TC / TP

Question 40

is there a distinct number of methods to | calculate ATC?

Answer 40

yes

Question 41

If so, how many methods?

Answer 41

2

Question 42

Define average total cost.

Answer 42

the total cost of production divided by the | number of units produced

Question 43

What is VC / TP?

Answer 43

AVC

Question 44

What is FC / TP?

Answer 44

AFC

Question 45

ATC = ? + ?

Answer 45

AVC ; AFC

Question 46

Is average fixed cost impotant to determining the average cost?

Answer 46

yes

Question 47

What are the formulas for the two methods | to calculate ATC?

Answer 47

``` ATC= TC / TP ATC= AVC + AFC ```

Question 48

You have to determine total cost before | getting the average total cost.

Answer 48

True

Question 49

The concept of ATC is not important to | economists.

Answer 49

False

Question 50

How many variable costs are there in | microeconomics?

Answer 50

3

Question 51

How many fixed costs are there?

Answer 51

1

Question 52

Name the three variable costs

Answer 52

variable marginal average

Question 53

Define AVC (average variable cost):

Answer 53

cost of labor per unit of output produced

Question 54

Define AFC (average fixed cost)

Answer 54

fixed cost per unit of output produced

Question 55

In the ATC curve, costs fall because of what | two things:

Answer 55

increase in output | rises in productivity

Question 56

In the ATC curve, costs rise because of what?

Answer 56

decrease in productivity

Question 57

AFC shrinks as output _________

Answer 57

increases

Question 58

Define marginal cost:

Answer 58

cost of producing an extra unit of output

Question 59

Remember:

Answer 59

ATC = AFC + AVC

Question 60

Marginal cost curve cuts through the AVC | curve at the __________ point.

Answer 60

minimum

Question 61

Which one of the three would maximize profit for a firm? - MC - AFC - AVC

Answer 61

none of them would help maximize a profit