Assignment No.

Name: Bushra Qaiser.

Reg: 1666106.

Instructions: Only hard copy and stapled copies will be accepted. Write your Own Answers. Deadline:
06-DEC-16

Q. 1 The WXY Corporation has fixed costs of $50. Its total variable costs (TVC) vary with output as shown
in the following table.

Refer to the table. The average total cost of 4 units of output is:
A) $27.50
B) $40.00
C) $52.50
D) $210.00
Q. 2 Explicit costs and implicit costs:
A) Are alike in that both represent opportunity costs
B) Are alike in that both reflect an outlay of cash
C) Are alike in that both are deducted from revenue to find accounting profit
D) Differ in that only explicit costs are deducted from revenue to find economic profit

Q. 3 Suppose that a business incurred implicit costs of $300,000 and explicit costs of $1,300,000 over
the past year. If the firm earned $1,400,000 in revenue, its:
A) Accounting profits were $400,000 and its economic profits were $100,000
B) Accounting losses were $200,000 and its economic profits were $100,000
C) Accounting profits were $100,000 and its economic profits were zero
D) Accounting profits were $100,000 and its economic losses were $200,000

Q.4 Which one of the following short-run cost curves would not be affected by an increase in the wage
paid to a firm's labor?
A) Average variable cost
B) Average fixed cost
C) Average total cost
D) Marginal cost

Q. 5
If marginal product is positive but falling:
A) Marginal cost must also be falling
B) Average product must be falling
C) Total product is increasing at a decreasing rate
 D) Total product is falling

Q. 6 The distinguishing feature of the short run is that:

A) At least one input is fixed
B) Output is fixed
C) Input prices are variable
D) Technology is variable
7. The WXY Corporation has fixed costs of $30. Its total variable costs (TVC) vary with output as shown in
the following table.

Refer to the table. The marginal cost of the fourth unit of output is:
A) $30
B) $40
C) $50
D) $60

Q.8
Suppose a firm is working in Short and have fixed cost of Rs. 50. And have variable cost as following

Total
Product Total
(Q) Variable Cost
0 0
1 45
2 85
3 120
4 150
5 185
6 225
7 270
8 325
9 390
10 465

As discussed in class draw table for Q, F.C., V.C, T.C., AFC, AVC, ATC, MC. And draw the graphs for all the
lines. (Hand written)