6. Refer to Table 13.5. The average fixed cost of producing five widgets is a. $

Question

6. Refer to Table 13.5. The average fixed cost of producing five widgets is a. $1.00 b. $2.00 c. $3.00 d. $5.00 7. Refer to Table 13-5. The average variable cost of producing four widgets is a. $2.00 b. $2.50 c. $3.33 d. $5.00 S. Refer to Table 13-5. The average total cost of producing one widget is a. $1.00 b. $10.00 c. $11.00 d. $22.00. 9. Refer to Table 13-5. The marginal cost of producing the sixth widget is a. $1.00. b. $3.50. c. $5.00. d. $6.00. 10. Refer to Table 13-5. What is the variable cost of producing five widgets? a. $13.00 b. $14.00 c. $15.00 d. It can't be determined from the information given. 11. Marginal cost equals (i) change in total cost divided by change in quantity produced. (ii) change in variable cost divided by change in quantity produced (ii)the average fixed cost of the current unit. a. (i) and (i) b. (ii) and (ii) c. (i) only d. All of the above are correct. Tabue 13-s .cost tor ABC inc widgettecteruly Qvontih'e ab Lk Tota Fiked of widgets COS+ Cos+ 0. Ce 13 4 5

Explanation / Answer

Ans)

Ans)

6.
b. $2
AFC=FC/Q
AFC=10/5=2

7.
b. $2.5
AVC=VC/Q
AVC=10/4
AVC=2.5

8.
c. $11
ATC=TC/Q
ATC=11/1=11

9.
d. $6
MC=6

Table:

The fixed cost remains the same for all quantities.

TC=FC+VC

VC=TC-FC

MC=TCn-TCn-1

Quantity VC TC FC MC 0 0 10 10 1 1 11 10 1 2 3 13 10 2 3 6 16 10 3 4 10 20 10 4 5 15 25 10 5 6 21 31 10 6

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