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1. If a firm produces no output (Q=0) for a period, what would its total cost of production be?
A. Zero
B. total fixed cost
C. The maximum marginal cost
D. total variable cost
2. What is the term for the addition to total cost that producing the last unit of output brings?
A. marginal cost
B. marginal product
C. Average product
D. Average total cost
3. Which of the following statement is NOT true?
A. total fixed costs are lower at lower production level
B. the costs of inputs which are impossible to adjust in the short run can be a source of fixed costs
C. total fixed costs equal total costs minus total variable costs
D. average variable cost is the total variable cost divided by the quantity of output
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