1. Marginal costs rise because: A.The marginal productivity of labor falls due t
ID: 1125264 • Letter: 1
Question
1. Marginal costs rise because:
A.The marginal productivity of labor falls due to the onset of diminishing returns.
B. The average productivity of labor falls because of decreasing returns to scale.
C. A firm doubles its inputs and its output more than doubles.
D. The marginal productivity of labor falls due to mounting coordination problems.
E. Output is decreasing due to the onset of negative returns.
2. Average fixed costs fall as output increases because:
A. The marginal productivity of labor increases with output.
B. Increasing returns to scale reduce fixed costs.
C. Fixed costs are spread over increasing amounts of output.
D. Firms are able to specialize their inputs as output increases and lower their fixed costs.
E. Sales rise faster than output.
Average total costs rise becausE
Average fixed costs increase.
Decreasing returns to scale.
Increasing returns to scale.
Marginal costs increase and rise above average total costs.
The cost of coordinating inputs rise.
1 points
Question 5
Economists argue that the opportunity cost of opening a business is:
The loss of one's free time.
The forgone consumption of goods and services.
The loss of income from working.
The alternative business that could have been created.
The loss of income if they made a financial investment instead.
A.The marginal productivity of labor falls due to the onset of diminishing returns.
B. The average productivity of labor falls because of decreasing returns to scale.
C. A firm doubles its inputs and its output more than doubles.
D. The marginal productivity of labor falls due to mounting coordination problems.
E. Output is decreasing due to the onset of negative returns.
2. Average fixed costs fall as output increases because:
A. The marginal productivity of labor increases with output.
B. Increasing returns to scale reduce fixed costs.
C. Fixed costs are spread over increasing amounts of output.
D. Firms are able to specialize their inputs as output increases and lower their fixed costs.
E. Sales rise faster than output.
Average total costs rise becausE
Average fixed costs increase.
Decreasing returns to scale.
Increasing returns to scale.
Marginal costs increase and rise above average total costs.
The cost of coordinating inputs rise.
1 points
Question 5
Economists argue that the opportunity cost of opening a business is:
The loss of one's free time.
The forgone consumption of goods and services.
The loss of income from working.
The alternative business that could have been created.
The loss of income if they made a financial investment instead.
Explanation / Answer
1. Marginal cost increases because output decreases because of onset of negative returns.
OPTION E
2. AFC = TFC / Q
Because TFC remains same throughout the business, it is spread across increasing amount of output.
OPTION C
3. Average total cost rises because of the diminishing returns to scale.
OPTION B
4. Opportunity cost of opening a business would be the loss of revenues that could have been generated if the money used in setting up the business was deposited in a bank or any financial investment that could have been made.
OPTION E
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