Chapter 11

Question 1

How many types of costs are there

Answer 1

7 lol

Question 2

Def of a Fixed cost

Answer 2

Cost that does not vary with the level of output in the short run (the cost of all fixed factors of production) e.g property taxes, insurance payments

Question 3

Def of a variable cost

Answer 3

Costs that varies with the level of output in the short run (the cost of all VARIABLE factors in production)

Question 4

Variable cost depends on the _________________, whereas fixed cost ________.

Answer 4

Output level produced, does not

Question 5

Def of a total cost

Answer 5

All costs of production: the sum of variable cost and fixed cost

Question 6

Avg fixed cost, avg variable cost and avg total cost

Answer 6

FC/quantity of output, VC/quantity of output, TC/quantity of output

Question 7

Marginal cost is the

Answer 7

Change in total cost that results from a one-unit change in output
MC = change in TC / change in Q = chang in VC / change in Q

Question 8

MC curve cuts the AVG VC curve at the

Answer 8

Minimum value of the AVC

Question 9

Minimum of a MC curve corresponds to

Answer 9

The maximum of a MP curve

Question 10

Minimum of AVC curve corresponds to

Answer 10

Maximum of AP curve

Question 11

MC = w/MP

Answer 11

AVC = w/AP