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In: Economics

Questions 15-20 are based on the following table of cost production at Betty's Bakery Quantity of...

Questions 15-20 are based on the following table of cost production at Betty's Bakery

Quantity of Cakes Fixed Cost Variable Cost Total Cost Average Fixed Cost AverageVariableCost AverageTotalCost MarginalCost
1 $13 $38
2 $28
3 $70
4 $64
5 $110
6 $108
7 $133
8 $185

15. What is the fixed cost of production at Betty's Bakery?

a) $12

b) $20

c) $25

d) $51

16. What is the variable cost of producing 5 cakes at Betty's Bakery?

a) $64

b) $85

c) $90

d) $100

17. What is the total cost of producing 2 cakes at Betty's Bakery?

a) $48

b) $53

c) $58

d) $62

18. What is the average variable cost of producing 3 cakes at Betty's Bakery?

a) $14

b) $15

c) $16

d $17

19. What is the average fixed cost of producing 3 cakes at Betty's Bakery?

a) $1.67

b) $2.67

c) $5.33

d) $8.33

20. What is the marginal cost of the second cake at Betty's Bakery?

a) $14

b) $15

c) $28

d) $34

Solutions

Expert Solution

Solution-

15. What is the fixed cost of production at Betty's Bakery?

The correct option is C. $25

Reason-

FC = TC - VC

= $38 - $13

= $25

16. What is the variable cost of producing 5 cakes at Betty's Bakery?

The correct option is B. $85

Reason-

VC = TC - FC

= $110 - $ 25

= $85

17. What is the total cost of producing 2 cakes at Betty's Bakery?

The correct option is B. $53

Reason-

TC = FC + VC

= $28 + $25

= $53

18. What is the average variable cost of producing 3 cakes at Betty's Bakery?

The correct option is B. $15

Reason-

Average Variable cost = Variable cost / Quantity

VC = TC - FC = $70 - $25 = $45

AVC = $45 / 3 = $15

19. What is the average fixed cost of producing 3 cakes at Betty's Bakery?

The correct option is D. $8.33

Reason-

AFC = FC / Q = $25 / 3 = $8.33

20. What is the marginal cost of the second cake at Betty's Bakery?

The correc option is B. $15

Reason-

MC = change in TC / change in quantity

= $38 - $53 / 1 - 2

= -$15 / -1

= $15

Rahul Sunny answered 1 year ago
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