Int 8

The term for costs that cannot be avoided in the short run

• Total Cost
• Fixed Cost
• Average Cost
• Variable Cost

The cost minimizing combination of inputs is 4.3 of L and 0.59 of K. Is this an interior or corner solution?

• Interior

• Corner

Cost for producing a certain level out output is minimized where

• the MRS=MRT.

• the indifference curve is tangent to the isocost curve.

• the isoquant is tangent to an isocost.

• the isoquant is tangent to the budget line.

Which is true about an isocost?

• shows all combinations of inputs that cost a certain amount to use

• slope = w1/w2

• Is a linear curve

• all of these

Which of the following terms shows the amount of an input (like labor) needed to produce a certain level of output?

• the isocost

• conditional demand for labor

• the isoquant

• the cost functions

Lagrangians

• can be used for cost minimization problems

• cannot be used for cost minimizing problem

• can only be used in maximization problems

• are the only way to solve optimization problems