COST OF PRODUCTION, SHORT AND LONG RUN

Total Costs / Quantity = _____

• Marginal Cost
• Average Total Cost
• Implicit Cost
• Explicit Cost

Change in Total Revenue/Change in Quantity
ΔTR/ΔQ = _____

• Marginal cost
• Marginal Revenue
• Profit
• Marginal Profit

 Total Revenue - Total Cost = _____

• Profit
• Revenue
• Marginal Revenue
• Variable Revenue

The amount a firm receives for the sale of its output.
P x Q = _____

• Profit
• Total Revenue
• Marginal Revenue
• Average Profit

Measure of profit  which includes both explict and implicit costs.

• Economic Profit
• Accounting Profit

Economists usually assume that ________ is a fixed input in the ________ run.

• labor; short

• capital; short

• labor; long

• capital; long

Wilbur's Widgets, a widget company, produces 100 widgets. Its average fixed cost is $5 and its total variable cost is $300. What is the total cost of producing 100 widgets?

• $300

• $400

• $700

• $800

If a firm's total costs are $100 when 10 units of output are produced and $103 when 11 units of output are produced, the marginal cost of the 11th unit is

• $2

• $3

• $5

• $7

In the long run, ______________________.

• all costs are fixed costs.

• all costs are variable cost.

• at least one is a fixed cost.

• none of the above occurs

Assuming the price of labor (L) is $5 per unit and the price of capital (K) is $10 per unit, what production technique should this firm use to produce 2 units of output?

• production technique A

• production technique B

• The firm is indifferent between production technique A and production technique B.

• It is impossible to determine if the firm should select production technique A or B because total fixed costs are not given.