Free Response Practice Cost Curves- Microeconomics Unit 3

Jacob Clifford provides a practice session on microeconomics, focusing on cost curves and their behaviors. The video covers identifying different cost curves, explaining the behavior of the marginal cost curve, understanding average fixed costs, and identifying the short run supply curve. The tutorial includes detailed explanations and encourages viewers to test their understanding using a free response from the College Board.

What is the primary focus of the 2005 Form B free response discussed in the video?

• Cost of production

• Consumer behavior

• Demand and supply analysis

• Market structures

Which curve is identified as the marginal cost curve in a perfect competitive industry?

• Curve 4

• Curve 3

• Curve 2

• Curve 1

What happens to the marginal cost curve due to specialization?

• It initially increases

• It fluctuates randomly

• It initially decreases

• It remains constant

Why does the marginal cost curve eventually start increasing?

• Because of the law of diminishing marginal returns

• Due to increasing returns to scale

• As a result of technological advancements

• Due to decreasing input prices

What is the vertical distance between the average total cost and average variable cost curves?

• Fixed cost

• Average fixed cost

• Variable cost

• Total cost

Why does the average fixed cost decrease as output increases?

• Because fixed costs increase

• Due to decreasing variable costs

• Fixed costs are spread over a larger quantity

• Because total costs decrease

Which part of the marginal cost curve represents the short-run supply curve?

• Below the average variable cost

• Above the average total cost

• Above the average variable cost

• The entire curve