Cost Curves in Economics

What is the shape of the average fixed cost curve?

• upward sloping

• horizontal

• curved

• downward sloping

What is the shape of the average variable cost curve?

• V-shaped

• L-shaped

• W-shaped

• U-shaped

What is the shape of the average total cost curve?

• V-shaped

• L-shaped

• W-shaped

• U-shaped

What is the shape of the marginal cost curve?

• U-shaped

• W-shaped

• L-shaped

• V-shaped

What is the relationship between average variable cost and marginal cost?

• Marginal cost measures the total cost of producing all units, while average variable cost measures the cost of producing one unit.

• Marginal cost measures the average cost per unit of output, while average variable cost measures the additional cost of producing one more unit.

• Marginal cost measures the cost of producing one unit, while average variable cost measures the total cost of producing all units.

• Marginal cost measures the additional cost of producing one more unit, while average variable cost measures the average cost per unit of output.

What is the relationship between average total cost and marginal cost?

• Marginal cost intersects average total cost at its minimum point.

• Average total cost and marginal cost are unrelated.

• Marginal cost is the slope of the average total cost curve.

• Average total cost is always greater than marginal cost.

What is the relationship between average fixed cost and average total cost?

• Average fixed cost is equal to average total cost.

• Average fixed cost is unrelated to average total cost.

• Average fixed cost is a subset of average total cost.

• Average fixed cost is a component of average total cost.

What is the relationship between average variable cost and average total cost?

• Average variable cost is the sum of average total cost and average fixed cost.

• Average total cost is equal to average variable cost.

• Average variable cost and average total cost are unrelated.

• Average total cost is the sum of average variable cost and average fixed cost.

What is the relationship between average fixed cost and average variable cost?

• They are inversely related.

• They are the same thing.

• They have no relationship.

• They both contribute to the total average cost.

What is the concept of economies of scale?

• The concept of economies of scale is where the average cost of production increases as the quantity of output increases.

• The concept of economies of scale is where the average cost of production remains constant regardless of the quantity of output.

• The concept of economies of scale is where the average cost of production decreases as the quantity of output increases.

• The concept of economies of scale is where the average cost of production is unrelated to the quantity of output.