ECON Chapter 5 Review

the mean price of a unit of output

• average revenue

• break-even point

• marginal cost

• marginal revenue

• total revenue

average price of a unit sold times the quantity sold

• average revenue

• break-even point

• marginal cost

• marginal revenue

• total revenue

additional revenue generated from the sale of a single unit

• average revenue

• break-even point

• marginal cost

• marginal revenue

• total revenue

level of production needed for a firm to recover its costs

• average revenue

• break-even point

• marginal cost

• marginal revenue

• total revenue

additional expense of producing

• average revenue

• break-even point

• marginal cost

• marginal revenue

• total revenue

Which terms describe costs that are incurred regardless of a firm’s rate of production?

• fixed costs and overhead

• fixed costs and total costs

• variable costs and overhead

• variable costs and total costs

Over which of these does a producer have the most direct control?

• fixed cost

• variable cost

• average revenue

• marginal revenue

Which of these is an example of a fixed cost?

• labor

• delivery charges for output

• depreciation of capital goods

• charges for a factory’s electrical use

Which of these is an example of a variable cost?

• raw materials

• interest fees on bonds

• state and local property taxes

• payments on leased properties

What risk does a firm take by neglecting to do periodic marginal analyses?

• It may lose track of its fixed costs.

• It may lose track of its total revenue.

• It may lose track of its break-even point.

• It may lose track of its profit-maximizing quantity of output.