Which of the following cost functions exhibits cost complementary?
Correct answer(s):
- -4Q1Q2 + 8Q1
Topic
The Production Process and Costs
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Quizzes in The Production Process and Costs
For the cost function C(Q) = 200 + 3Q + 8Q2 + 4Q3, what is the average fixed cost of producing six units of output?
Correct answer(s):
- 33.33
For the cost function C(Q) = 1000 + 14Q + 9Q2 + 3Q3, what is the marginal cost of producing the fourth unit of output?
Correct answer(s):
- $230
What is implied when the total cost of producing Q1 and Q2 together is less than the total cost of producing Q1 and Q2 separately?
Correct answer(s):
- Economies of scope
Given a cost function C(Q) = 200 + 14Q + 8Q2, what is the marginal cost function?
Correct answer(s):
- 14 + 16Q
Which curve(s) does the marginal cost curve intersect at the (their) minimum point?
Correct answer(s):
- Average total cost curve and average variable cost curve
At what level of output is marginal cost minimized:
Correct answer(s):
- 90
What is the marginal cost of producing 90 units of output?
Correct answer(s):
- 8.75
What is the average total cost of producing 160 units of output?
Correct answer(s):
- 19.38
What is the average variable cost of producing 50 units of output?
Correct answer(s):
- 14
What is the total cost of producing 125 units of output?
Correct answer(s):
- 2400
Suppose you are a manager of a factory. You purchase five (5) new machines at one million dollars each. If you can resell two of the machines for $500,000 and three of the machines for $200,000, what are the sunk costs of purchasing the machines?
Correct answer(s):
- $3.4 million
Costs that are forever lost after they have been paid are:
Correct answer(s):
- Sunk costs
Costs that change as output changes are:
Correct answer(s):
- Variable costs
Fixed costs exist only in:
Correct answer(s):
- The short run
In order to minimize the cost of producing a given level of output, a firm manager should use more inputs when:
Correct answer(s):
- Its price falls
Which of the following sets of economic data is minimizing the cost of producing a given level of output?
Correct answer(s):
- MPL = 20, MPK = 40, w = $16, r = $32
Changes in the price of an input cause:
Correct answer(s):
- Slope changes in the isocost line
In order for isoquants to have a diminishing marginal rate of substitution they must be:
Correct answer(s):
- None of the statements associated with this question are correct
The Leontief production function implies:
Correct answer(s):
- L-shaped isoquants