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50-Business_Growth_Costs

50-Business_Growth_Costs - Student Name 27 September 2010...

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Student Name: Group: 27 September 2010 Total Possible Marks: 20 Short Run Production and Cost and Business Growth A set of short answer questions to test your understanding of this topic 1 1. A business operating in the short run sees a downward shift in their marginal cost curve. A possible cause of this change in marginal costs might be A. A fall in the rate of depreciation of capital equipment due to age B. A fall in the level of corporation tax (a tax on business profits) C. A fall in the price of imported raw materials and components D. A fall in the annual rental costs for the company’s head office E. A fall in the interest rate on business loans to finance capital investment 1 2. A change in a firm’s marginal costs has no effect on their fixed costs of production A. True B. False 1 3. Which of the following statements must be true when a firm’s average total costs and average variable costs are identical? 1
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