Short Run Costs 7.3-11 ~ Benjamin Rainwater

Question 1

An increase in the price of the variable input results in…

Answer 1

AVC (average variable cost),

ATC (average total cost) and MC (marginal cost) moving up together

Question 2

When variable price increases, do the curves change shape?

Answer 2

No

Question 3

An increase in the price of the fixed input results in

Answer 3

only the ATC moving up

Question 4

An improvement in technology shifts one or more of the cost curves down/up?

Answer 4

down

Question 5

Average Variable Cost (AVC)
and Average Total Cost (ATC)
are u-shaped curves and the
vertical difference between them
is?

Answer 5

Average Fixed Costs (AFC)

Question 6

AFC (average fixed cost)
decreases/increases as quantity
increases?

Answer 6

decreases

Question 7

AFC (average fixed cost)
and this decreases as quantity
increases intersect at what point?

Answer 7

at their minimum
points by Marginal Cost (MC),
which slopes upward.

Question 8

If the price of the fixed input
increases only the (?) moves
upwards

Answer 8

ATC curve

Question 9

If technology improves one or

more of the cost curves move downward/upward?

Answer 9

downward

Question 10

The difference between ATC and AVC is?

Answer 10

AFC

Question 11

ATC means

Answer 11

Average Total Costs

Question 12

AFC+AVC=

Answer 12

ATC