Use the following information to answer the next 3 questions.
The total cost (TC) of producing output (Q) is: TC = 200 + 5Q
8. The fixed cost is
9. The marginal cost is 10. The average total cost is
11. If the wage rate is $20 per hour and the cost of capital is $25 per hour, then the slope of the isocost curve will be
a) 25/20
b) 1/25
c) 4/5
d) ¼
12. The total cost of producing a given level of output is
a) Achieved when inferior goods are involved
b) Minimized when MPk/Pk = MPL/PL
c) The two inputs are superior
d) All of the above
13. Say PK =10 and PL = 20 and the producerâs total budget is $100. What is the equation of the budget line?
a) PL + PK = 20
b) 100 = PK + PL
c) 100 = 20L + 10K
d) 100 = 10L + 5K
14. Deadweight loss refers to
a) Loss of consumer surplus because of government regulations
b) Losses due to labor unions
c) Net loss of consumer and producer surplus
d) Producers seeking excessive profits
15. An effective price ceiling causes a loss of
a) Both consumer and producer's surplus
b) Producer's surplus only
c) Neither producer nor consumer surplus
d) None of the above
16. Import tariffs generally result in
a) Higher domestic prices
b) Less consumer surplus
c) Higher producer surplus for domestic producers
d) All of the above
