Which of the following statements is correct :
(a) When the Average Cost is rising, the Marginal Cost must also be rising.
(b) When the Average Cost is rising, the Marginal Cost must be falling.
(c) When the Average Cost is rising, the Marginal Cost is above the average cost.
(d) When the Average Cost is falling, the Marginal Cost must be rising.
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标题: Reading 17: Output and Costs-LOS c 习题精选 [打印本页]
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- What is the relationship between marginal cost and average total cost?
- What is the relationship between MC and the ATC?
- Which of the following statements best describes the relationship between the average and marginal costs of a firm?
- What is the relationship between the marginal cost MC curve the average total cost ATC curve and the average variable cost AVC curve?
Session 4: Economics: Microeconomic Analysis
Reading 17: Output and Costs
LOS c: Distinguish among total cost (including both fixed cost and variable cost), marginal cost, and average cost, and explain the relations among the various cost curves.
Which of the following most accurately describes the relationship between marginal cost (MC), average variable cost (AVC), marginal product (MP), and average product (AP)?
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At some output level Q and corresponding labor input L, MC = AVC and MP = AP. At Q and L, AVC is at its minimum and AP is at its maximum. Hint: draw the curves.
作者: 1215 时间: 2011-3-6 16:05Which of the following most accurately describes the relationship between the average total cost (ATC) curve and the average variable cost (AVC) curve? The vertical distance between the ATC and AVC curves:
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The vertical distance between the ATC curve and AVC cost curve is average fixed cost, which decreases as output increases because more output is averaged over the same cost.
作者: 1215 时间: 2011-3-6 16:06Which of the following statements regarding marginal costs (MC) and average variable costs (AVC) is most accurate?
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MC = AVC at minimum average variable cost. MC = ATC at minimum average total cost.
作者: 1215 时间: 2011-3-6 16:06Which of the following most accurately describes the shapes of the average variable cost (AVC) and average total cost (ATC) curves?
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The AVC curve is U-shaped, declining at first due to efficiency, but eventually increasing due to diminishing returns. The AFC curve decreases as output increases, and eventually flattens out. The ATC is U-shape because it is the sum of the decreasing-to-flat AFC curve plus the U-shaped AVC curve. ATC = AFC + AVC.
作者: 1215 时间: 2011-3-6 16:06Which of the following most accurately describes the shape of the average fixed cost (AFC) curve? The AFC curve:
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The AFC curve declines initially, but as output increases it flattens because a fixed cost is being averaged over more and more units of output.
作者: 1215 时间: 2011-3-6 16:06John Klement is a soybean farmer who harvests 125,000 bushels of soybeans annually. Klement’s fixed costs are $200,000 and his variable costs are $5 per bushel. Soybeans are currently priced at $5.35 per bushel. Based on his estimates, Klement sees soybean prices being relatively stable for the next two years, then increasing to $7.00 per bushel due to increased demand from Japan. What action should Klement take? Klement should:
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Since Klement is selling soybeans, a common commodity, he is a price taker and therefore can not adjust the price. He should continue operating his business as normal as he is currently covering variable costs and part of fixed costs. In two years from now, he will be able to cover both fixed and variable costs and be able to make a substantial profit.
作者: 1215 时间: 2011-3-6 16:06If marginal cost is above the average cost, when you produce your next unit:
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If marginal cost is above the average cost, when you produce your next unit, average cost will increase. Because marginal cost is the cost of producing the next unit, and because this cost is above the firm's average cost per unit, the average cost per unit must increase, if only slightly. Based on the information provided in the question, there is no way to know what will happen to the marginal cost of future units produced.
作者: luqian55 时间: 2011-9-29 16:31thanks a lot
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What is the relationship between marginal cost and average total cost?
When the average cost declines, the marginal cost is less than the average cost. When the average cost increases, the marginal cost is greater than the average cost. When the average cost stays the same (is at a minimum or maximum), the marginal cost equals the average cost.
What is the relationship between MC and the ATC?
The relationship between the ATC and MC. Whenever MC is less than ATC, ATC is falling. Whenever MC is greater than ATC, ATC is rising. When ATC reaches its minimum point, MC=ATC.
Which of the following statements best describes the relationship between the average and marginal costs of a firm?
Answer and Explanation: The correct answer to the given question is option c. Marginal Cost crosses Average Variable Cost at Average Variable Cost's minimum point. The marginal cost is the cost incurred by a firm in producing one incremental or additional unit of product.
What is the relationship between the marginal cost MC curve the average total cost ATC curve and the average variable cost AVC curve?
Answer and Explanation: When the marginal cost (MC) curve is above the average total cost (ATC) curve and average variable cost (AVC) curve, then increasing the production by a unit increases both the ATC and AVC.