1. Which is the correct formula for the total cost of production?Note: TC is total Cost, AFC is average fixed cost, AVC is average variable cost, MC is marginal cost, TVC is total variable cost, TFC is total fixed cost, and Q is output

A. TC = (AFC + AVC) (Q)

B. TC = TVC + TFC

C. TC = (MC)(Q)

D. A and B are correct

E. A, B and C are correct

2. What is/are the correct formula for the marginal cost of production?

A. change in total cost given the change in output

B. change in variable cost given the change in output

C. change in fixed cost given the change in output

D. A and B are correct

E. A, B, C are correct

3. What is true with profit maximization of the firm using the Total Revenue Total Cost approach?

A. The only requirement to find the optimal output that maximizes economic profit is that the difference between the total revenue and the total cost is the highest

B. The total revenue should be lower than the total cost

C. The total revenue should be higher than the total cost

D. A and B are correct

E. A and C are correct

4. Given a demand equation: Q = 39 - 0.5 P, what is the equation for the inverted demand?

A. P = 39 - Q

B. P = 39 - 2Q

C. P = 78 - 2Q

D. P = 78 - 0.5Q

E. No correct answer

5. Given the inverted demand equation that you find in # 16, find the total revenue equation. Note the caret (^) denotes that the number next to it is an exponent. Thus Q^2 is read square of the quantity demanded

A. TR = 39Q - Q^2

B. TR = 39Q - 2Q^2

C. TR = 78Q - 0.5Q^2

D. TR = 78Q - 2Q^2

E. No correct answer

6. Given the total revenue function you found in # 17, derive the profit function if the total cost function is TC = 10 + 2Q.

A. Profit = - 2Q^2 + 78Q - 10

B. Profit = - 2Q^2 + 80Q - 10

C. Profit = - 2Q^2 + 76Q - 10

D. Profit = 20^2 + 76Q - 10

E. No correct answer

7. Given the total revenue and the total cost function in # 18, the corresponding marginal revenue is computed as MR = 78 - 4Q, while the marginal cost is MC = 2, find the optimal level of output that maximizes profits where MR = MC

A. Q = 18

B. Q = 19

C. Q = 20

D. Q = 21

E. No correct answer

8. Given the total revenue and the total cost functions in # 18, what is the total profits if the firm produces 18?

A. 708

B. 710

C. 712

D. 714

E. No correct answer

9. Given the total revenue and total cost functions in # 18, what is the total profits if the firm produces Q = 19?

A. Profit = 708

B. Profit = 710

C. Profit = 712

D. Profit = 714

E. No correct answer

10. Given the total revenue and the total cost functions in # 18, what is the total profits if the firm produces Q = 20?

A. Profit = 708

B. Profit = 710

C. Profit = 712

D. Profit = 714

E. No correct answer

11. Given the total revenue and the total cost functions in # 18, what is the total profits if the firm produces Q = 21?

A. Profit = 708

B. Profit = 710

C. Profit = 712

D. Profit = 714

E. No correct answer

12. Is the optimal output the same using the Total Revenue Total Cost approach and the Marginal Revenue Marginal Cost approach methods?

A. No

B. Yes

13. How much is the total fixed costs given the total cost function in # 18 where TC = 10 + 2Q ?

A. TFC = 2Q

B. TFC = Q

C. TFC = 10

D. TFC =100

E. No correct answer