Chapter 5: Cost of Production PART B: TRUE FALSE QUESTIONS 1. If a firm is minimizing the total cost of producing a given level of output, then it must also be maximizing the level of outputproduced at a given level of total cost. 2. Marginal cost shows the cost of a typical unit of output if total cost is divided evenly over all units produced. 3. average cost is the additional; increase in total cost that arises from an extra unit of production. 4. Regardless of how many goods and services are produces, fixed costs do not vary with the quantity of output produced. Rent, machines, and full-time bookkeepers are examples of fixed costs. 5. Regardless of the number of outputs produced, the average-fixed-cost curve is always constant. 6. The economic costs of a firm are the explicit or implicit costs for resources used for production by the firm. 7. Economic profit is an explicit cost, while normal profit is an implicit cost. 8. In the short run the size (the capacity) of a firm's plant is fixed. 9. The resources employed by a firm are all variable in the long run and all fixed in the short run. 10. The larger the output of a firm, the smaller the fixed cost of the firm. 11. Fixed costs can be controlled or altered in the short run. 12. Total costs is the sum of fixed and variable costs at each level of output. 13. Marginal cost is the change in fixed cost divided by the change in output. 14. The marginal cost curve intersects the average total cost (ATC) curve at the ATC curve's maximum point, 15. Marginal cost is equal to average variable cost at the output at which average variable cost is at a minimum. 16. If the price of a variable input should increase, the average variable cost, average total cost, and marginal cost curves would all shift upward, but the position of the average fixed cost curve would remain unchanged