Question The minimum efficient scale of output occurs when: 

The minimum efficient scale of output occurs when:
a. short-run total cost is minimum
b. short-run average total cost is minimum
c. long-run marginal cost is minimum
d. long-run average total cost is minimum

Company XYZ produces cellular phones brand GREENBERRY, at an annual rate of 500,000 units. Its total fixed costs are $6 million per year, and at is current rate of output, its total variable costs for the year will be 80 million. The price of the GREENBERRY is $450. What is the degree of operating leverage for the GREENBERRY?
a. 1.04
b. 2
c. 1.5
d. 2.8
Which of the following alternatives represent economic costs?
a. implicit costs
b. sunk costs
c. explicit costs
d. b and c
Managers, in the decision making process, will always take into account
a. historical costs
b. relevant costs
c. sunk costs
d. average fixed cost
Suppose that a company has the following total cost function: TC = 2Q2 – 10Q + 200.
The marginal cost function (MC) is:

a. – 10Q + 200.
b. 200/Q
c. 2Q – 10 + 200/Q
d. 4Q – 10
At an automobile assembly plant XYZ the progress ratio of 0.9 is used as a metric for learning. At the plant workers assembled 1,000 cars of model BW, and the average total cost is $25,000. What would be the expected cost per car for the 4,000th car?
a. $22,500
b. 18,225
c. 20,250
d. 21,402
Which of the following costs does not depend upon output?
a. average total costs
b. variable costs
c. fixed costs
d. marginal costs
If a firm doubles the amount of inputs used in production and as a result output has more than doubled, then the firm is experiencing
a. diminishing returns to scale
b. constant returns to scale
c. economies of scale
d. diseconomies of scale
Suppose that a company has the following total cost function: TC = 2Q2 – 10Q + 200.
The average variable cost function (AVC) is:

a. 2Q – 10 +200/Q
b. 200/Q
c. 2Q+ 200/Q
d. 2Q – 10
The breakeven point of a firm occurs at the level of output where
a. marginal cost equals average variable cost
b. price equals marginal cost

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