Consider the three figures below, depicting possible cost functions for a firm. The horizontal axis measures output in all figures, while the vertical axis measures dollars. A B Which of the following statements are correct? Choose one or more: OA. Figure A could represent the average total cost. O B. Figure B could represent the average total cost. * C. Figure C could represent the average total cost. D. If Figure B represents the average variable cost, then Figure C could not represent the average total cost. E. If Figure Brepresents the marginal cost, then Figure C cannot represent the average total cost.

Consider the three figures below, depicting possible cost functions for a firm. The horizontal axis measures output in all figures, while the vertical axis measures dollars. A B Which of the following statements are correct? Choose one or more: OA. Figure A could represent the average total cost. O B. Figure B could represent the average total cost. * C. Figure C could represent the average total cost. D. If Figure B represents the average variable cost, then Figure C could not represent the average total cost. E. If Figure Brepresents the marginal cost, then Figure C cannot represent the average total cost.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter13: The Cost Of Production

Section: Chapter Questions

Problem 6PA

See similar textbooks

Similar questions

Average total cost tells us the O 1) cost of the last unit of output, if total cost does not include a fixed cost component. 2) variable cost of a firm that is producing at least one unit of output. 3) O 4) total cost of the first unit of output, if total cost is divided evenly over all th units produced. cost of a typical unit of output, if total cost is divided evenly over all the uni produced.
In the short run production function O a. All inputs are variable O b. All inputs are fixed O C. There are fixed and variable inputs Od. Technology alone is variable
In the short run, the cost of O a. capital; labor O b. labor; capital c. electricity; wages d. raw materials; labor O e. capital; raw materials is variable, whereas the cost of is fixed. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism.Answer completely and accurate answer.Rest assured, you will receive an upvote if the answer is accurate.
What is the firm’s total variable cost at this level of output? $ e. What is the firm’s fixed cost at this level of output? $ f. What is the firm’s profit if it produces this level of output? Instructions: If the firm is taking a loss, enter this as negative (−) profits. $ g. What is the firm’s profit if it shuts down? Instructions: If the firm is taking a loss, enter this as negative (−) profits. $ h. In the short run, should this firm continue to operate or shut down?
Which of the following statements is not correct? Select one: O a When MC is below AVC, AVC is rising. O b. The total product curve shows how a firm's output changes when the quantity of labour changes. O c. Diminishing marginal returns occur when the marginal product of a worker is less than the marginal product of the previous worker. O d. The change in total product resulting from a one-unit increase in the quantity of labour is called marginal product. ous page Next
1.A 15 per cent increase in all inputs leads to only a 5 per cent increase in the output. Are the returns to scale increasing, constant or diminishing? Illustrate your answer2.What is the slope of an iso-cost line equal to and why? Provide mathematical explanation3.“By definition, cost is zero if a firm does not hire any input. Hence cost-minimization essentially means shutting down the operation of the firm.” Do you agree with the statement? Justify you answer by giving an explanation from microeconomic theory.4.What is meant by an expansion path? Illustrate expansion paths for a normal input and an inferior input.
6. Which of the following are true (check all that apply) Note: IRTS=increasing returns to scale, CRTS=constant returns to scale, DRTS=decreasing returns to scale a. if the production function exhibits IRTS, then the cost function will exhibit economies of scale b. if the production function exhibits IRTS, then the cost function will exhibit diseconomies economies of scale c. if the cost function exhibits diseconomies of scale, then the producing function exhibits DRTS d. if the production function exhibits CRTS, then the cost function will exhibit constant economies of scale e. if the production function exhibits DRTS then the cost function will exhibit diseconomies of scale
2.)Do fixed costs refer to the long run or short run? Why?3) Suppose that labor is the only variable input in the production process. If the marginal cost of production is diminishing as more units of output are produced, what can you say about the marginal product of labor?4) What are economies of scale? What are economies of scope? What is the difference between the two?
t is said that total variable cost curves are moved by only two factors. What are those factors? (hint: think Jevons) Show graphically and explain how each change impacts variable costs.
a. Why will firms in most markets be located at or close to the bottom of the longrun average cost curve? b. Distinguish between implicit and explicit costs. How is it possible to havepositive accounting profit and negative economic profit concurrently? c. Distinguish between economies of scale and constant returns to scale. What shape will the long-run average cost curve have for economies of scale andconstant returns to scale. d. What is the difference between production in the short run and production in the long run? Explain the shape of the long-run cost curve in relation to shortrun cost curves?
Why would a firm be happy to earn zero economic profits? Because zero economic profit means that the firm earns Select one.O. enough in total revenues to pay for all the fixed cost and some but not all of the variable costs.O. enough in total revenues to pay for all the accounting costs but none of the opportunity costs.O. zero accounting profit.O. enough in total revenues to pay for all the accounting costs and all of the opportunity costs.
. What are the firm's fixed costs?$ c. What is the variable cost of producing 475 units of output (use least-cost)?$ d. How many units of the variable input should be used to maximize profits?e. What are the maximum profits this firm can earn?$ f. Over what range of the variable input usage do increasing marginal returns exist?From ___ to ____g. Over what range of the variable input usage do decreasing marginal returns exist?From ___ to ___h. Over what range of input usage do negative marginal returns exist?From ___ to ___ . What are the firm's fixed costs?$ c. What is the variable cost of producing 475 units of output (use least-cost)?$ d. How many units of the variable input should be used to maximize profits?e. What are the maximum profits this firm can earn?$ f. Over what range of the variable input usage do increasing marginal returns exist?From to g. Over what range of the…