Technology, Production, And Costs Practice Problems Microeconomics Worksheet Page 5
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1022. When a firm produces 50,000 units of output, its total cost equals $6.5 million. When it
increases its production to 70,000 units of output, its total cost increases to $9.4 million. Within
this range, the marginal cost of an additional unit of output is
A) $41.43.
B) $134.29.
C) $135.
D) $145.
23. If the 15th unit of output has a marginal cost of $29.50 and the average cost of producing 14
units of output is $30.23, what will happen to the average cost of production if the 15th unit is
produced?
A) Average cost increases as more is produced.
B) Average cost will fall.
C) Average cost could increase or decrease depending on what happens to variable cost.
D) Average cost could increase or decrease depending on what happens to fixed cost.
24. When the marginal product of labor rises, ceteris paribus,
A) the marginal cost of production will exceed the average total cost.
B) the marginal cost of production also rises.
C) the marginal cost of production falls.
D) the average total cost of production also rises.
25. If fixed costs do not change, then marginal cost
A) also remains constant.
B) equals the change in variable cost divided by the change in output.
C) equals the change in average variable cost divided by the change in output.
D) equals the change in average fixed cost divided by the change in output.
26. Which of the following costs will not change as output changes?
A) marginal cost
B) total variable cost
C) average variable cost
D) total fixed cost
27. Which of the following equations is correct?
A) AVC - ATC = AFC
B) AVC + ATC = AFC
C) AFC + AVC = ATC
D) ATC + AVC = AFC
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