4.1.4.4 Marginal and Average Cost Curves (MC & AC) VIDEO

What economic principle explains the shape of the marginal and average cost curves?

• Law of demand

• Law of increasing returns

• Law of diminishing marginal returns

• Law of supply

What does the initial rise in total product, marginal product, and average product indicate?

• Decreasing returns

• Constant returns

• Increasing returns

• No change in returns

What are the fixed costs when no output is produced?

• 15 pounds

• 5 pounds

• 0 pounds

• 10 pounds

What is the hourly wage rate for workers as assumed in the cost calculations?

• 10 pounds

• 5 pounds

• 15 pounds

• 20 pounds

How is average cost calculated according to the video?

• Total cost multiplied by quantity

• Total cost divided by quantity

• Total cost minus quantity

• Total cost plus quantity

What does marginal cost represent in the context of production?

• Average cost of all units

• Total cost of production

• Cost of producing one more unit

• Fixed cost per unit

At what point does the average cost start to rise after initially falling?

• When total cost is minimized

• When marginal cost is below average cost

• When output is maximized

• When marginal cost exceeds average cost

What does the average cost curve look like according to the video?

• Starts high, then falls, then rises

• Starts low, then only rises

• Remains constant throughout

• Starts low, rises, then falls

What is the shape of the marginal cost curve as described in the video?

• Rises then falls slightly

• Falls then rises dramatically

• Constantly falling

• Constantly rising

Why does marginal cost decrease with increasing marginal product?

• Due to increased total cost

• Due to decreased demand

• Due to lower fixed costs

• Due to higher labor productivity