Question

In: Economics

2. Which of the following costs are always increasing as output increases? (a) Variable Cost only...

2. Which of the following costs are always increasing as output increases? (a) Variable Cost only (b) Fixed Cost only (c) Marginal Cost only (d) Total Cost only (e) Total Cost and Variable Cost

3.A firm has a Cobb-Douglas production function ? = 50√ ??. This function exhibits a constant return to scale. The total cost function for this production process is ? ? = ? · √ ?·? 50 , where ? is output level, ? and ? are prices of labor and capital. The marginal cost of production for this function is: (a) Constant. (b) Increasing. (c) Decreasing. (d) None of the above.

4. If some production function ?(?, ?) exhibits an increasing return to scale, then the marginal cost of production decreases as output level increases. (a) True. (b) False. (c) Not enough information given. (d) None of the above.

5. It will never cost more to produce a certain amount of output in the long run than in the short run. (a) True. (b) False. (c) Not enough information given. (d) None of the above.

Solutions

Expert Solution

Rahul Sunny answered 1 week ago
Next > < Previous

Related Solutions

Which of the following costs is always constant? a. average variable cost b. average total cost...
Which of the following costs is always constant? a. average variable cost b. average total cost c. average fixed cost d. none of the above
Assuming an inflationary environment where costs are always increasing, which cost flow assumption gives you the...
Assuming an inflationary environment where costs are always increasing, which cost flow assumption gives you the highest Net Income? (answer choices) A. FIFO B. Weighted Average C. Specific Identification D. LIFO
2. Suppose that a firm can decrease the rate at which its variable cost increases by...
2. Suppose that a firm can decrease the rate at which its variable cost increases by paying a larger fixed cost up front. Plot the two fixed cost curves in one diagram. Plot the two average fixed cost curves in a second diagram. Plot the two variable cost curves in a third diagram. Plot the two average cost curves in a final diagram. Explain why this kind of technological change may explain why large chain stores like WalMart and Costco...
2. Suppose that a firm can decrease the rate at which its variable cost increases by...
2. Suppose that a firm can decrease the rate at which its variable cost increases by paying a larger fixed cost up front. Plot the two fixed cost curves in one diagram. Plot the two average fixed cost curves in a second diagram. Plot the two variable cost curves in a third diagram. Plot the two average cost curves in a final diagram. Explain why this kind of technological change may explain why large chain stores like WalMart and Costco...
As the activity level increases, which of the following will decrease? A. Variable cost per unit...
As the activity level increases, which of the following will decrease? A. Variable cost per unit B. Fixed cost in total C. Fixed cost per unit D. Variable cost in total
Bob makes widgets. Variable costs per unit are $2. Fixed cost per unit (at an output...
Bob makes widgets. Variable costs per unit are $2. Fixed cost per unit (at an output level of 100) are $1 per unit. The normal sales price per unit is $5. A customer approaches Bob offering to buy 40 widgets for $4 each. Assume Bob has excess capacity. 1) What is the effect on operating income if he accepts the order? Additional revenue – additional cost = effect on oper. income. Fixed costs won’t change so additional costs = VC...
Which of the following costs are variable? Cost 10,000 Units 30,000 Units 1. $100,000 $300,000 2....
Which of the following costs are variable? Cost 10,000 Units 30,000 Units 1. $100,000 $300,000 2.   40,000   240,000 3.   90,000   90,000 4.   50,000   150,000 only 1 only 2 1 and 2 1 and 4
2.) Fill in the following table: Show work if possible Output Total Cost Fixed Cost Variable...
2.) Fill in the following table: Show work if possible Output Total Cost Fixed Cost Variable Cost ATC AFC AVC MC 0 100 1 122 2 142 3 154 4 176 5 201 6 235 7 270 8 326 9 398 10 490 b.) Now suppose this firm is in a perfectly competitive industry. The market price of the output is $25. How many units of output will this firm choose to produce in the short run? What is the...
Variable Statement Under variable costing, the cost of goods manufactured includes only variable manufacturing costs. This...
Variable Statement Under variable costing, the cost of goods manufactured includes only variable manufacturing costs. This type of income statement includes a computation of manufacturing margin. Saxon, Inc. Variable Costing Income Statement For the Year Ended December 31 Sales $1,280,000 Variable cost of goods sold:   Variable cost of goods manufactured $560,000   Ending inventory (112,000)     Total variable cost of goods sold (448,000) Manufacturing margin $832,000 Variable selling and administrative expenses (240,000) Contribution margin $592,000 Fixed costs:   Fixed manufacturing costs $240,000   Fixed...
When output volume increases, do variable costs per unit increase, decrease, or stay the same within...
When output volume increases, do variable costs per unit increase, decrease, or stay the same within the relevant range of activity? How can absorption costing lead to incorrect short-run pricing decisions?
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT