The Costs Of A Firm

Question 1

Firms

Answer 1

Generate revenue and incur costs

Question 2

Economists include

Answer 2

Opportunity cost in the cost of production

Question 3

In the short run

Answer 3

Some costs are fixed

Question 4

Fixed costs

Answer 4

Dont vary with output in the short run. They have to be paid whether or not anything is produced.

Question 5

Variable costs

Answer 5

These do vary with output. They increase as output increases.

Question 6

In the long run

Answer 6

All costs are variable.

Question 7

Total cost and average cost include

Answer 7

Fixed costs and variable costs

Question 8

Total cost

Answer 8

Is all the costs involved in producing a particular level of output.

Question 9

Average cost

Answer 9

Is the cost per unit produced.

Question 10

Marginal cost is

Answer 10

The cost of increasing output by one unit.

Question 11

Marginal cost is the extra cost

Answer 11

Incurred as a result of producing the final unit of output.

Question 12

Lowest average cost occurs when

Answer 12

Marginal cost equals average cost.