In the long run, Select one: a. some resources are variable and some resources are fixed. b. all resources are fixed. C. at least one resource is fixed. d. there are no explicit costs. e. all the resources can be varied.
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- 1. How does fixed cost affect marginal cost? Why is this relationship important? 2. Is it possible for total utility to increase while marginal utility diminishes? Explain. 3. Define economies of scale and explain why they might arise. Define disecononies of scale and explain why they might arise.A company is planning to manufacture mountain bikes. Fixed monthly cost will be $100,000 and it will cost $100 to produce each bicycle. a. Write the cost function, C, of producing x mountain bikes. b. Write the average cost function, C, of producing x mountain bikes. c. How many mountain bikes must be produced each month for the company to have an average cost of $300 per bike?The amount of money that a firm pays to buy inputs (resources) is called a. fixed cost b. total cost c. marginal cost d. variable cost Give your reasons
- Jane’s Juice Bar has the following cost schedules:a. Calculate average variable cost, average total cost, and marginal cost for eachquantity.b. Graph all three curves. What is the relationship between the marginal-cost curveand the average-total-cost curve? Between the marginal-cost curve and the averagevariable-cost curve? Explain.Refer to the table below. How will the marginal cost curve look like if you draw it? Units of Output Total Cost 10 20 20 40 30 60 40 80 50 100 60 120 Select one: a. upward sloping b. downward sloping c. horizontal d. verticalIf the marginal cost is above the average cost at a certain level of production and the firmdecides to increase output, then:a. The average cost will increase but the marginal cost will decrease.b. Both the average and the marginal cost will increase.c. The average cost will increase but the average cost will decrease.d. Both the average and the marginal cost will decrease.
- 1. Explain the meaning of: a. Fixed cost b. Variable cost Stating an example of each above. 2. Explain the meaning of Marginal Cost?Suppose, Home Style is a well-known furniture manufacturer in the Sultanate. To meet the increasing demand, the company increased the production of some furniture items. As a result, there was an increase in the cost of raw materials such as plywood, timber and plastic etc. What do you call the amount spent by Home Style on these resources? a. Indirect cost b. Implicit cost c. Average cost d. Variable costTo economists, the main difference between the short run and the long run is that: the law of diminishing returns applies in the long run, but not in the short run.B. in the long run all resources are variable, while in the short run at least one resource is fixed.C. fixed costs are more important to decision making in the long run than they are in the short run.D. in the short run all resources are fixed, while in the long run all resources are variable.