Cost of Production

In the long run...

• All inputs are fixed

• All input are variable

• at least one input is variable and one input is fixes

• at most one input is variable and one input is fixed

Total Costs / Quantity = _____

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

 Total Revenue - Total Cost = _____

• Profit
• Revenue
• Marginal Revenue
• Variable Revenue

Costs that do not change when the quanity of output produced changes?

• Fixed Costs
• Variable Costs
• Explicit Costs
• Implicit Costs

The marginal product of an input is:

• total product divided by the amount of the input used to produce this amount of output.

• the addition to total output that adds nothing to total revenue.

• the addition to total output that adds nothing to profit.

• the addition to total output due to the addition of one unit of all other inputs.

• the addition to total output due to the addition of the last unit of an input, holding all other inputs constant.

At 100 units of output, a firm's total cost is $10,000. If the firm's total fixed cost is $4,000, its average variable cost is equal to:

• $140
• $100
• $60
• $40

What does marginal cost (MC) tell us?

• Is cost from fixed input

• Is variable cost

• The increase in output that arises from an additional unit of input

• The increase in total cost that arises from producing an additional unit of output

Average product is defined as:

• total product divided by the total cost.

• total product divided by marginal product

• total product divided by the variable input.

• marginal product divided by the variable input.

The change in total product resulting from a change in a variable input is:

• average product

• marginal cost.

• marginal product

• implicit product

Suppose the first four units of a variable input generates corresponding total outputs of 200, 350, 450, 500. The marginal product of the third unit of input is:

• 50

• 100

• 150

• 200