costs test apas

Question 1

long term

Answer 1

no factors of production are fixed they are all variable

Question 2

short term

Answer 2

at least one factor of production is fixed

Question 3

define mc

Answer 3

the extra cost for producing an extra good

Question 4

define internal economics of scale

Answer 4

An internal economy of scale measures a company’s efficiency of production. That efficiency is attained as the company improves output when the average cost per product drops.

Question 5

two examples of fixed cost

Answer 5

salaries and rent and loans

Question 6

two example of variables

Answer 6

wage and raw materisl

Question 7

definition of diseconomies of scale

Answer 7

Diseconomies of scale happen when a company or business grows so large that the costs per unit increase. It takes place when economies of scale no longer function for a firm.

Question 8

FC

Answer 8

don’t change in short run - do not cary in output

Question 9

VC

Answer 9

change in the short run - vary directly with output

Question 10

AVC =

Answer 10

TVC divided by output

Question 11

Afc =

Answer 11

Tfc divided by output

Question 12

AC

Answer 12

= TC divided by output

Question 13

MC

Answer 13

change in tc divided by change in output