# Which of the following is not true if a firm shuts

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Chapter 13 / Exercise 03
Principles of Microeconomics
Mankiw
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12.Which of the following is NOT true if a firm shuts down and produces zero output in the short run?a.Variable costs will be zero. b.Losses will be incurred. c.Fixed costs will be greater than zero. d.Fixed costs will be less than zero. **
13.Of the following types of costs, which is most likely a fixed cost for a shoe manufacturer?
14.A company that produces luxury automobiles has the following simplified costs. What is the marginal cost of the second automobile? # of Automobiles.....Fixed Cost..........Total Variable Costs 0.......................\$50,000............\$0 1.......................\$50,000............\$10,000 2.......................\$50,000............\$20,000 3.......................\$50,000............\$40,000
15.A security system company’s total production costs depend on the number of systems produced according to the following equation: Total Costs = \$10,000,000 + \$2000*quantity produced.What is the average total cost of production when 20,000 units are produced?
16.As a manufacturer increases output, which of the following costs should decrease? a.Average total cost. b.Average fixed cost. **c.Marginal cost. d.Average variable cost.
17.As a shoe company produces more shoes the average total cost of each shoe produced decreases. This is because
18. A security system company’s total production costs depend on the number of systems produced according to the following equation: Total Costs = \$10,000,000 + \$2000*quantity produced. Given these data, which of the following is a false statement? 6
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Chapter 13 / Exercise 03
Principles of Microeconomics
Mankiw
Expert Verified
19.A spirits manufacturer is considering two potential production investments:Option A costs an initial \$2 billion and will involve variable costs (labor and material) of \$5 per bottle of spirits. Option B costs an initial \$4 billion and will involve variable costs (labor and material) of \$3 per bottle of spirits. Assuming an annual capital charge equal to 10 percent of the initial costs, what is the average fixed cost at production level of 30,000,000 bottles per year for the Option A facility?