101. How will a firm know if it has grown too large, that 102. Refer to the following table. What is the total cost is, when it has exceeded its minimum efficient of producing five (5) units of the good? scale of production? a. $1,050 a. Its long-run average costs begin to decrease. b. $950 b. Its long-run average costs begin to increase. c. $1,025 c. Its market power begins to diminish. d. $825 d. The number of other firms in the market rises. e. $1,000 e. All of its workers quit and go to work for the ANS: B DIF: Difficult TOP: V.B. competition. REF: Costs in the Short Run MSC: Applying ANS: B DIF: Difficult TOP: IV.F. REF: Costs in the Short Run MSC: Understanding Total Fixed Total Variable Average Fixed Average Average Total Output Cost Cost Total Cost Cost Variable Cost Cost Marginal Cost 1 $500 $200 A W N $800 $875 $106.25 $:50 ?? ? ? $100 $25 $450 103. Refer to the following table. What is the average variable cost of producing three (3) units of the 104. Which of the following is an example of a long-run cost for a manufacturing firm? good? a. $80 a. the purchase of additional raw materials b. $120 b. hiring more employees c. $140 c. an increase in the size of its factory d. $20 d. paying higher tax rates e. $420 e, increasing the size of its management team ANS: C DIF: Difficult TOP: V.B. ANS: C DIF: Medium TOP: V. REF: Costs in the Short Run MSC: Applying REF: Costs in the Long Run MSC: Remembering Total Fixed Total Variable Average Fixed Output Cost Cost Total Cost Cost Average Variable Cost Average Total Cost Marginal Cost UI A W N $600 1 ?? ? ? ? $320 $440 $500 1