chapter 220

1.Which of the following statements accurately describes how to compute marginal cost? (A) Marginal cost is the change in total cost divided by the change in total variable cost. (B) Marginal cost is the difference between total cost and total variable cost. (C) Marginal cost is the difference between average total cost and average fixed cost. (D) Marginal cost is the change in total cost divided by the change in output. (E) Marginal cost is the change in total fixed cost divided by the change in output. 2.Of all short-run cost curves, which one has a downward slope for all units of output?.

3.In the short run, the marginal product of labor is inversely related to

4.Suppose that a firm experiences a technological improvement such that the total product of labor curve increases at every quantity of labor employed. How will this affect the marginal product of labor and marginal cost of production in the short run? upward no change

5.Suppose that a firm experiences a technological catastrophe such that the total product of labor curve shifts downward at every quantity of labor employed. How will this affect the average product of labor and average variable cost of production in the short run?

6.All else equal, in the short run as more labor is employed, average product of labor ___________, and average variable production cost

7.Total revenue is calculated by (A) Multiplying the number of units sold by the average total cost of producing those units. (B) Dividing the total cost of production by the number of units produced (C) Subtracting average total cost from the price at which the units were sold (D) Multiplying the number of units sold by the average variable cost of producing those units (E) Multiplying the number of units sold by the price at which they were sold

8.Fred sells hot dogs at a constant price of $3 and incurs a constant marginal cost of $1. On a typical day he sells 100 hot dogs. What is Fred's daily total revenue from selling hot dogs? (A) $300 (B) $200 (C) $100 (D) $600 (E) $400

9.A firm produces Zurgs and no matter how many Zurgs are sold, the market price is unaffected. The marginal revenue of the next Zurg sold is equal to (A) Marginal profit (B) Average total cost (C) Price (D) Average variable cost (E) Marginal product