Midterm 3

Which of the following is true

• When MP is falling, AP is falling 

• When AP is rising, marginal product is rising 

• When average product exceeds marginal product, marginal product is rising 

• When marginal product exceeds average product, average product is rising 

An increase in the wage rate that a firm pays its workers  _______. 

• does not shift its marginal cost curve but shifts its average total cost curve upwards 

• does not change its marginal cost curve or its average total cost curve

• shifts both its marginal cost curve and its average total cost curve upward 

• shifts its marginal cost curve upward but not its average total cost curve 

The graph illustrates  Acme, Inc.'s  short-run total cost curves. Curve B is the TVC curve, curve C is the TC curve. Choose the statement that is correct.

• Total variable cost and total cost both increase as output increases.

• The vertical gap between curves B and C is equal to total variable cost. 

• As total variable cost  increases, total fixed cost increases but at a slower rate. 

• The total fixed cost curve is curve B.  

Which of the following is a variable cost?

• Interest payments

• Raw material costs

• Property taxes

• All of the above

If the output levels at which short-run marginal and average cost curves reach a minimum are listed in order from smallest to greatest, then the order would be

• AVC, MC, ATC

• ATC, AVC, MC

• MC, AVC, ATC

• AVC, ATC, MC

If an input is owned and used by a firm, then its

• explicit cost is zero

• implicit cost is zero

• opportunity cost is zero

• economic cost is zero

Short-run marginal cost is equal to

• the change in total cost divided by the change in output.

• the change in total variable cost divided by the change in output.

• the cost per unit of the variable input divided by the marginal product of the variable input.

• all of the above.

Which of the following short-run cost curves declines continuously?

• Average total cost

• Marginal cost

• Average fixed cost

• Average variable cost

• 1 = MC, 2= AVC, 3=ATC 

• 1=MC, 2=ATC, 3= AVC 

• 1=TC, 2=ATC, 3=MC 

• 1=MC, 2=TC, 3=ATC 

What does the vertical distance AB measure? 

• ATC

• MC

• AFC

• TVC