Short-Run Costs 7.3-6 Hunter Parrott

Question 1

Average Variable Cost

Answer 1

variable cost per unit of total product.

Question 2

AVC calculation

Answer 2

divide variable cost at a given total product level by that total product

Question 3

Does AVC determine if the output level is potentially profitable.

Answer 3

YES

Question 4

Variable Cost

Answer 4

the wage cost required to prodice a given level of output, or the wages paid times the number of workers at each output level.

Question 5

If total production is 10, and Variable cost is $2000, what is the AVC?

Answer 5

$200

Question 6

AVC is a guide to show the firm whether a certain output level is ______

Answer 6

profitable

Question 7

If the AVC is greater than the price of the product, would there be potential profit?

Answer 7

No Shot

Question 8

if AVC is lower than the price, could the firm make a profit?

Answer 8

Yes

Question 9

You can sell a TV at $150. If your’ TP was 48 and your’ VC was $6000, could it be profitable?

Answer 9

Yes

Question 10

You can sell a TV for $150. If your’ TP was 48 and your” VC was $8000, could it be profitable?

Answer 10

No

Question 11

What tells the firm if the output level is potentially profitable?

Answer 11

AVC

Question 12

What is the AVC?

TP=42 VC=2,226

Answer 12

AVC= 53