Production Costs and Marginal Productivity Quiz

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Questions and Answers

What does total cost (TC) represent?

  • The total dollar expense that is paid out even when no output is produced
  • The lowest total dollar expense needed to produce each level of output q (correct)
  • The money value of the production factors used/consumed in the period
  • The cost of renting warehouses and installed machinery

What does fixed cost (FC) represent?

  • The total dollar expense that is paid out even when no output is produced (correct)
  • The lowest total dollar expense needed to produce each level of output q
  • The money value of the production factors used/consumed in the period
  • The cost of renting warehouses and installed machinery

How are costs defined in the context of production?

  • The profit obtained from the production of goods or services
  • The money value of the production factors used/consumed in the period
  • The expenses incurred to produce the good or service during the period (correct)
  • The total revenue generated from the sale of goods or services

What is the impact of marginal productivity on production costs?

<p>It affects the production costs of the enterprises (D)</p> Signup and view all the answers

How do returns to scale affect production costs?

<p>They affect the production costs of the enterprises (D)</p> Signup and view all the answers

What is the relationship between total cost (TC) and the level of output q?

<p>TC rises as q rises. (D)</p> Signup and view all the answers

Which of the following is an example of fixed cost (FC)?

<p>Cost of renting warehouses (B)</p> Signup and view all the answers

How does the analysis of marginal productivity affect production costs?

<p>It influences the total cost by affecting the level of output. (C)</p> Signup and view all the answers

What do production costs represent?

<p>The expenses incurred to produce the good or service during a specific period. (B)</p> Signup and view all the answers

How are fixed costs (FC) affected by the quantity of output produced?

<p>Fixed costs remain constant regardless of the quantity of output produced. (C)</p> Signup and view all the answers

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