ECON 206 HW 7

question

The lesson of is to forget about the money that's irretrievably gone and instead to focus on the marginal costs and benefits of future options.

answer

Sunk costs

question

An individual firm's supply curve for a good is derived from:

answer

The marginal cost of producing that good

question

When deciding how much of a good to produce, a producer should:

answer

Always produce an additional unit if price is greater than marginal cost

question

Marcella operates a small, but very successful art gallery. Which of the following is not a variable cost for Marcella's business?

answer

Physical space for the gallery

question

Why is labor considered a variable cost?

answer

Producing larger quantities of a good or service generally requires more workers

question

If a paper mill shuts down its operations for three months so that it produces nothing, its ______________ will be reduced to zero?

answer

Variable costs

question

I'MABigCorp. produces and sells kitchen wares. Last year, it produced 7,000 can openers and sold each one for $6. To produce the 7,000 can openers, the company incurred variable costs of $28,000 and a total cost of $45,000. I'MABIGCorp.'s average fixed cost to produce the 7,000 can openers was

answer

$2.43

question

I'MaGadgetCo. produces and sells widgets. Last year, it produced 9,000 widgets and sold each one for $8. To produce the 9,000 widgets, the company incurred variable costs of $27,000 and a total cost of $36,000. I'MaGadgetCo's average fixed cost to produce 9,000 widgets was

answer

$1.00

question

The marginal cost curve is generally ______________ , because diminishing marginal returns implies that additional units are ______________ .

answer

upward-sloping; more costly to produce

question

Whatever the firm's quantity of production, ______________ must exceed total costs if it is to earn a profit.

answer

Total revenue

question

Fixed costs are important because, at least in the ______________ , the firm ______________.

answer

short run; cannot alter them

question

In order to calculate marginal cost, the change in ______________ is divided by the amount of change in quantity.

answer

Total cost

1 of 12

question

The lesson of is to forget about the money that's irretrievably gone and instead to focus on the marginal costs and benefits of future options.

answer

Sunk costs

question

An individual firm's supply curve for a good is derived from:

answer

The marginal cost of producing that good

question

When deciding how much of a good to produce, a producer should:

answer

Always produce an additional unit if price is greater than marginal cost

question

Marcella operates a small, but very successful art gallery. Which of the following is not a variable cost for Marcella's business?

answer

Physical space for the gallery

question

Why is labor considered a variable cost?

answer

Producing larger quantities of a good or service generally requires more workers

question

If a paper mill shuts down its operations for three months so that it produces nothing, its ______________ will be reduced to zero?

answer

Variable costs

question

answer

$2.43

question

answer

$1.00

question

The marginal cost curve is generally ______________ , because diminishing marginal returns implies that additional units are ______________ .

answer

upward-sloping; more costly to produce

question

Whatever the firm's quantity of production, ______________ must exceed total costs if it is to earn a profit.

answer

Total revenue

question

Fixed costs are important because, at least in the ______________ , the firm ______________.

answer

short run; cannot alter them

question

In order to calculate marginal cost, the change in ______________ is divided by the amount of change in quantity.

answer

Total cost

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ECON 206 HW 7

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