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Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050

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BuyFindarrow_forward

Principles of Microeconomics

7th Edition
N. Gregory Mankiw
ISBN: 9781305156050
Textbook Problem

This chapter discusses many types of costs: opportunity cost, total cost, fixed cost, variable cost, average total cost, and marginal cost. Fill in the type of cost that best completes each sentence:

a. What you give up in taking some action is called the ________.

b. ________ is falling when marginal cost Ls below it and rising when marginal cost is above it.

c. A cost that does not depend on the quantity produced is a(n) ________.

d. In the ice-cream industry in the short run, ________ includes the cost of cream and sugar but not the cost of the factory.

e. Profits equal total revenue minus ________.

f. The cost of producing an extra unit of output is the _________.

To determine
Fixed cost, variable cost, total cost, opportunity cost, average total cost and marginal cost.

Explanation

Option (a): When you give something up to get some action is called an opportunity cost.

Option (b): When the marginal cost is below the average total cost, then the latter is falling; it increases when the marginal cost is above it.

Option (c): Fixed cost is the cost which does not depend on the quantity produced or sold...

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