Econ Unit 4 FA Dummy 6, 2025-26

When a firm evaluates the expense change from increasing production by one unit, it is calculating:

• Marginal Cost

• Total Cost

• Average Revenue

• Fixed Cost

Why is marginal cost important for firms when deciding how many units to produce?

• It shows the total expenses over time

• It helps determine the cost of adding one more unit and maximizing profit

• It indicates fixed costs only

• It reflects consumer demand

What do you call the calculation where total cost is divided by the quantity of output produced?

• Average Total Cost

• Marginal Cost

• Fixed Cost

• Variable Cost

Average Total Cost refers to which of the following?

• Total cost divided by the quantity of output produced

• Total revenue minus total cost

• Cost of producing one more unit

• Total fixed costs over time

If a firm’s total cost is spread evenly across all units produced, what term describes this?

• Average Total Cost

• Marginal Cost

• Opportunity Cost

• Total Fixed Cost

The term for total cost divided by output quantity is known as:

• Average Total Cost

• Average Variable Cost

• Average Fixed Cost

• Total Cost

A company’s total cost is $10,000 and it produces 500 units. Which concept measures the cost per unit?

• Average Total Cost

• Marginal Cost

• Total Fixed Cost

• Opportunity Cost

In a scenario where a factory increases production, which measure will show the cost per unit as total cost changes?

• Average Total Cost

• Marginal Revenue

• Variable Cost

• Total Revenue

When assessing how cost efficiency changes as output increases, which term best applies?

• Average Total Cost

• Total Cost

• Marginal Cost

• Fixed Cost

If a business wants to understand the cost spread over each unit after a change in output, which measure should it examine?

• Average Total Cost

• Total Revenue

• Variable Cost

• Marginal Benefit