111. Which of the curves is most likely to represent average variable cost? a. A b. B c. C d. D 112.

111. Which of the curves is most likely to
represent average variable cost?
a. A
b. B
c. C
d. D

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112. Which of the curves is most likely to
represent marginal cost?
a. A
b. B
c. C
d. D

113. This particular firm is necessarily
experiencing increasing marginal product when curve
a. A
is falling.
b. B
is falling.
c. C
is falling.
d. D
is falling.

114. This particular firm is necessarily
experiencing diminishing marginal product when curve
(i) A
is rising.
(ii) B
is rising.
(iii) C
is rising.
a. (i)
only
b. (iii)
only
c. (i)
and (ii)
d. All
of the above are correct.

115. Curve A is U-shaped because of
a. diminishing
marginal product.
b. increasing
marginal product.
c. the
fact that increasing marginal product follows decreasing marginal product.
d. the
fact that decreasing marginal product follows increasing marginal product.

116. Total cost can be divided into two types.
Those two types are
a. fixed
costs and variable costs.
b. fixed
costs and marginal costs.
c. variable
costs and marginal costs.
d. average
costs and marginal costs.

117. Some costs do not vary with the quantity of
output produced. Those costs are called
a. marginal
costs.
b. average
costs.
c. fixed
costs.
d. incurred
costs.

118. For a construction company that builds houses,
which of the following costs would be a fixed cost?
a. the
$50,000 per year salary paid to a construction foreman
b. the
$30,000 per year salary paid to the company’s bookkeeper
c. the
$10,000 per year premium paid to an insurance company
d. All
of the above are correct.

119. For a large firm that produces and sells
automobiles, which of the following costs would be a variable cost?
a. the
$20 million payment that the firm pays each year for accounting services
b. the
cost of the steel that is used in producing automobiles
c. the
rent that the firm pays for office space in a suburb of St. Louis
d. All
of the above are correct.

120. Which of the following expressions is correct?
a. marginal
cost = (change in quantity of output)/(change in total cost).
b. average
total cost = total cost/quantity of output.
c. total
cost = variable cost + marginal cost.
d. All
of the above are correct.