Chapter 22 T or F Flashcards
The average variable cost curve must always be U shaped.
F
The marginal cost curve passes through the minimum point of the average fixed cost curve.
F
If the average cost curve is U shaped, then the marginal cost curve must cross the average cost curve at the bottom of the U.
T
The cost function C(y) = 10 + 3y has marginal cost less than average cost for all levels of output.
T
The cost function C(y) = 100 + 3y² has marginal cost less than average cost for all positive levels of output.
F
If a competitive firm uses two inputs and it has the production function F(x1, x2) = x1^(1/2) + x2^(1/2), then its marginal cost curve is horizontal.
F
Average cost can never rise while marginal costs are declining.
F
The area under the marginal cost curve measures total fixed costs.
F
If marginal costs increase as output increases, then the average fixed cost curve will be U-shaped.
F
Average fixed cost curves will be U-shaped if the marginal cost curve is upward-sloping.
F
