50-Business_Growth_Costs_Key - Student Name: 27 September...

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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? A. Total fixed costs of production are zero B. The firm will shut down because it will always make a loss C. Marginal costs are constant but positive D. Marginal costs are zero 1 4. Suppose the short-run total cost function for a business is given by the formula TC = 250 + 8Q. Where TC is total cost and Q is the level of output
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This note was uploaded on 02/08/2012 for the course ECO 51844 taught by Professor Sabet during the Spring '11 term at FIU.

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50-Business_Growth_Costs_Key - Student Name: 27 September...

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