merged

___ 11. Concerning the cost curves:
a. the AFC curve always slopes upward
b. the AVC and ATC curves eventually slope downward due to diminishing marginal
returns
c. the MC curve always intersects the ATC curve and the AVC curve at their lowest
points
d. All of the above
___ 12. If marginal cost is less than ATC:
a. ATC must be increasing
b. ATC must be decreasing
c. ATC must be at it lowest point
d. All of the above are possible
___ 13. If the total cost of six units is $380, and the total cost of seven units is $490, the marginal
cost of the seventh unit is:
a. $70
b. $110
c. $380
d. $490
___ 14. If the ATC of eight units is $75, the total cost of eight units is:
a. $9.38
b. $75
c. $600
d. $750
___ 15. If the ATC of ten units is $73.50, and the AFC of ten units is $35.00, the AVC of ten units
is:
a. $38.50
b. $73.50
c. $108.50
d. $385
___ 16. An example of an industry in which economies of scale tend to be very important is:
a. snow cone stand
b. lawn mowing service
c. ship building
d. All of the above
___ 17. If the minimum efficient scale in an industry is relatively large, there are likely to be:
a. many small producers in the industry
b. a few large producers in the industry
c. many large producers in the industry
d. a few small producers in the industry
___ 18. Regarding the cost curves:
a. the fixed cost curve will be horizontal
b. the total cost curve will run parallel to the variable cost curve
c. Both of the above
d. Neither of the above
___ 19. The break-even quantity of output:
a. occurs where profits are maximized
b. occurs where total revenue and total cost are equal
c. Both of the above
d. Neither of the above
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20 - 13 Production and Costs