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71. An example of a fixed cost would be
(i) raw
materials supplied at a government -regulated price.
(ii) rent
paid on a factory.
(iii) machine
maintenance.
a. (ii)
only
b. (i)
and (ii)
c. (ii)
and (iii)
d. All
of the above are correct.
72. Fixed costs can be defined as costs that
a. vary
inversely with production.
b. vary
in proportion with production.
c. are
incurred only when production is large enough.
d. are
incurred even if nothing is produced.
73. Suppose Jan is starting up a small lemonade
stand business. Variable costs for Jan’s lemonade stand would include the cost
of
a. building
the lemonade stand.
b. hiring
an artist to design a logo for her sign.
c. lemonade
mix.
d. All
of the above are correct.
74. If a firm produces nothing, which of the
following costs will be zero?
a. total
cost
b. fixed
cost
c. opportunity
cost
d. variable
cost
75. One assumption that distinguishes short-run
cost analysis from long-run cost analysis for a profit-maximizing firm is that
in the short run,
a. output
is not variable.
b. the
number of workers used to produce the firm’s product is fixed.
c. the
size of the factory is fixed.
d. there
are no fixed costs.
76. The cost of producing the typical unit of
output is the firm’s
a. average
total cost.
b. opportunity
cost.
c. variable
cost.
d. marginal
cost.
77. Average total cost is equal to
a. output/total
cost.
b. total
cost – total quantity of output.
c. average
variable cost + total fixed cost.
d. total
cost/output.
78. The amount by which total cost rises when the
firm produces one additional unit of output is called
a. average
cost.
b. marginal
cost.
c. fixed
cost.
d. variable
cost.
79. The cost of producing an additional unit of output
is the firm’s
a. marginal
cost.
b. productivity
offset.
c. variable
cost.
d. average
variable cost.
80. Average total cost equals
a. change
in total costs divided by quantity produced.
b. change
in total costs divided by change in quantity produced.
c. (fixed
costs + variable costs) divided by quantity produced.
d. (fixed
costs + variable costs) divided by change in quantity produced.
