Question

Please answer these question

Question 21

Which of the following is equivalent to ATC?

Group of answer choices

FC + VC.

FC + MC.

Change in total cost divided by change in output.

(FC + VC) ÷ Q.

Question 22

In the short run, average costs may rise as a firm increases the rate of production because:

Group of answer choices

Inflation causes the prices of resources to increase.

The supply curve for the product shifts.

Some inputs, such as plant and equipment, cannot be changed.

All of the above.

Question 23

The marginal cost curve intersects the minimum of the curve representing:

Group of answer choices

TC.

ATC.

AFC.

All of the above.

Question 24

If the marginal cost curve is rising, then which of the following must be true?

Group of answer choices

The average total cost curve must be rising.

The average total cost curve must be below the marginal cost curve.

The average total cost curve must be above the marginal cost curve.

Total costs must be rising.

Question 25

Explicit costs:

Group of answer choices

Include only payments to labor.

Are the sum of actual monetary payments made for resources used to produce a good.

Include the market value of all resources used to produce a good.

Are the total value of resources used to produce a good but for which no monetary payment is actually made.

Answer 1

1. Which of the following is equivalent to ATC?

(FC + VC) ÷ Q.

Explanation

ATC (Average total cost)=Total cost/Q

TC=FC+VC

FC+VC/Q=ATC

2. In the short run, average costs may rise as a firm increases the rate of production because:

Some inputs, such as plant and equipment, cannot be changed.

Explanation

In short run, there are fixed costs incurred on plant, equipments, machinery etc. In short run, these cannot be changed. Hence, even if the production is less, these costs are incurred which increases the average costs.

3. The marginal cost curve intersects the minimum of the curve representing:

Average total cost

Explanation

MC cuts the AC, at the lowest point of AC.

4. If the marginal cost curve is rising, then which of the following must be true?

The average total cost curve must be above the marginal cost curve.

When AC rises, MC is above it, whereas when AC is falling MC is below it

5. Explicit costs:

Are the sum of actual monetary payments made for resources used to produce a good.

Explanation

Explicit costs are monetary costs incurred on the production or business operations, whereas implicit costs are opportunity costs that not in monetary form but are in terms of the next best alternative that has to be given up