Short Run Costs 7.3-1&2 ~ Benjamin Rainwater

Question 1

Variable costs (VC) are

Answer 1

costs that change with the amount of output being produced.

Question 2

To calculate the variable costs (VC) for
producing a product, you need two pieces of
information. What is the first one?

Answer 2

1. the amount of labor needed to produce a

given amount of output

Question 3

To calculate the variable costs (VC) for
producing a product, you need two pieces of
information. What is the second one?

Answer 3

2. the wage that you have to pay to get that

amount of labor

Question 4

Wage is

Answer 4

a payment to an employee for labor services.

Question 5

VC=

Answer 5

Labor x number of employees

Question 6

Variable costs (VC) can be graphed by plotting

Answer 6

ariable cost and different outputs on a

two-dimensional graph.

Question 7

Inefficient points are excluded/included from the graph

Answer 7

excluded

Question 8

inefficient points are

Answer 8

those in which

additional workers cause total product to fall.

Question 9

At some point the VC curve starts going

backward. What are the points that are receding on the x axis?

Answer 9

Inefficient Points

Question 10

At the maximum output, you extend the

VC curve

Answer 10

vertically to represent that that was the maximum output.

Question 11

The Variable Cost curve is (?) shaped

Answer 11

S

Question 12

Labor x variable labor costs=

Answer 12

VC