practice questions_problems for chap 7 production and cost

practice questions_problems for chap 7 production and cost...

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ECON 2100 Practice Problems_questions for chapter 7 production and costs and supply Name: __________________________ Date: _____________ 1. Diminishing marginal returns occur when: A) each additional unit of a variable factor adds more to total output than the previous unit. B) an additional variable factor adds less to total output than the previous unit. C) the marginal product of a variable factor is increasing, but at a decreasing rate. D) all of the above are true. 2. The marginal cost curve intersects the average variable cost curve at: A) its lowest point. B) its maximum. C) its endpoint. D) no point; the curves don't intersect. 3. The long-run average cost curve is tangent to an infinite number of: A) total cost curves. B) marginal cost curves. C) average variable cost curves. D) average total cost curves. 4. At 30 units of output, a firm's marginal cost and average variable cost each equal $10. Therefore, assuming normally shaped cost curves, at 29 units of output its marginal cost: A) is greater than $10 and its average variable cost is less than $10. B) is less than $10 and its average variable cost is more than $10. C) and its average variable cost are each greater than $10. D) and its average variable cost are each equal to $10. Page 1
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5. The costs associated with variable inputs are _______ costs and the costs associated with _______ inputs are _______ costs. A) variable; fixed; fixed B) fixed; fixed; variable C) variable; fixed; variable D) fixed; fixed; fixed 6. At the long-run quantity of output, where the LRAC curve is at its lowest point, it is tangent to the ________ of the corresponding short-run average total cost curve. A)
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This note was uploaded on 03/16/2010 for the course ECON 2100 taught by Professor Klimenko during the Spring '08 term at Georgia Institute of Technology.

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practice questions_problems for chap 7 production and cost...

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