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ECO100ReviewSheet2FA07

# ECO100ReviewSheet2FA07 - ECO 100 Exam#2 Review Sheet Note...

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ECO 100 Exam #2 Review Sheet Note: If you have any questions about the review sheet, please talk to me, Jenny or Nellie. COST OF PRODUCTION Total variable cost : TVC Total fixed cost : TFC Total cost : TC = ……..+…….. Average cost = cost per unit (hint: divide cost by quantity) Average fixed cost : AFC = ………../ ………… Average variable cost : AVC =………../ ………… Average total cost : ATC =………../ ………… Marginal cost : MC =………../ ………… = ………../ ………… Q TFC TVC TC 0 2 0 2 1 2 4 6 2 2 7 9 3 2 13 15 4 2 22 24 5 2 35 37 1. Which of the following is true? When Q equals a) 1, ATC = 6 b) 2, AFC = 3.5 c) 0, ATC = 0 d) 4, ATC = 6 e) 3, AVC = 5 ECO 100 - Exam # 2 Review Sheet Page 1

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2. MC of the second unit is 9. TRUE / FALSE 3. MC of the first unit is 2. TRUE / FALSE Short run (SR) - draw total costs - draw average and marginal costs (TFC, TVC, TC) (AFC, AVC, ATC, MC) \$ \$ Q Q Cost curves shift when there is a change in: - ……………………………….. - ……………………………….. - ……………………………….. Long run (LR) – draw LRATC (long-run average total cost) \$ Q Show where on the curve are - economies of scale - constant returns to scale - diseconomies of scale ? Explain why they occur.
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