Levi pays each worker $600 per week.The cost of other variable inputs per chair is $30.His fixed cost per period is $400.

Workers' Wage = $600

Cost of other variable inputs perchair = $30

FC= $400

L Q Total cost (TC) Marginal cost (MC)

0 0

1 30

2 80

3 140

4 190

5 230

6 255

7 265

Question 1: Levi currently employs 5 workers.Levi decides to hire a sixth worker.The marginal cost per chair of the additional output produced by the sixth worker is,

A. $54

B. $58

C. $64

D. $72

Pete Zerria operates a pizzeria.The following shows Pete's cost function, where total cost is related to the quantity of pizza produced.

Dozen of pizzas (Q) Total cost (TC) Variable cost (VC) Average Variable cost (AVC)

0 100

1 140

2 170

3 195

4 225

5 265

6 325

Question 2: What is Pete's fixed cost?

A. $0

B. $80

C. $90

D. $100

Question 3: What is the variable cost of producing 3 dozen pizzas?

A. $50

B. $70

C. $85

D. $95

Question 4: What is the average variable cost of 4 dozen pizzas?

A. $40.0

B. $31.3

C. $35.5

D. $42.0

Question 5: Calculate the marginal cost (MC) of the 4th dozen pizzas.At Q = 3,

A. MC is below the AVC.

B. MC is above AVC

C. MC is equal to AVC