WGU C211 CH 13-17 QUESTIONS AND
ANSWERS WITH COMPLETE
SOLUTIONS
What is the change in total cost equal to in the marginal cost equation? ✔✔Marginal cost
multiplied by change in quantity.
Fixed costs equal: ✔✔Total costs minus variable costs
Economic profit is distinct from accounting profit because: ✔✔Economic profit incorporates both
explicit and implicit costs.
Total costs include: ✔✔Variable costs plus fixed costs.
Marginal costs consider: ✔✔The increase in total cost arising from an extra unit of production.
What response best describes the relationship between marginal costs and total costs?
✔✔Whenever marginal cost is less than average total cost, average total cost is falling.
Which statement is true about productivity? ✔✔The value of marginal product of labor equals
wage in a competitive firm.
A production function expresses the relationship between: ✔✔Quantity of resource inputs and
product/service outputs.
Opportunity costs include: ✔✔The income the entrepreneur could have earned working for an
employer.
, Economists and decision makers study and then make decisions or judgments based on
✔✔Marginal analysis.
The primary reason that the marginal cost curve declines and then increases is: ✔✔Firms
experience increasing marginal product, then diminishing marginal product.
Which of the following statements is accurate? ✔✔Marginal costs eventually rise with the quantity
of output.
perfectly competitive firm finds that at current production levels marginal cost is greater than
marginal revenue. What action should this firm take in order to pursue the maximization of profit?
✔✔Decrease the target output.
A competitive firm is characterized by ✔✔Trading of identical products.
Competitive firms experience marginal revenue that is: ✔✔Equal to price
n the short-run, a competitive firm would continue to produce under the following circumstance:
✔✔Total revenue exceeds total variable costs.
What fundamental shape does a demand curve take in a competitive market? ✔✔Horizontal
For a perfectly competitive firm which condition is true? ✔✔The demand curve is the same as the
marginal revenue curve.
Which condition is true for perfectly competitive firms in the long-run? ✔✔They will exit the
market if total revenue is less than total costs.
ANSWERS WITH COMPLETE
SOLUTIONS
What is the change in total cost equal to in the marginal cost equation? ✔✔Marginal cost
multiplied by change in quantity.
Fixed costs equal: ✔✔Total costs minus variable costs
Economic profit is distinct from accounting profit because: ✔✔Economic profit incorporates both
explicit and implicit costs.
Total costs include: ✔✔Variable costs plus fixed costs.
Marginal costs consider: ✔✔The increase in total cost arising from an extra unit of production.
What response best describes the relationship between marginal costs and total costs?
✔✔Whenever marginal cost is less than average total cost, average total cost is falling.
Which statement is true about productivity? ✔✔The value of marginal product of labor equals
wage in a competitive firm.
A production function expresses the relationship between: ✔✔Quantity of resource inputs and
product/service outputs.
Opportunity costs include: ✔✔The income the entrepreneur could have earned working for an
employer.
, Economists and decision makers study and then make decisions or judgments based on
✔✔Marginal analysis.
The primary reason that the marginal cost curve declines and then increases is: ✔✔Firms
experience increasing marginal product, then diminishing marginal product.
Which of the following statements is accurate? ✔✔Marginal costs eventually rise with the quantity
of output.
perfectly competitive firm finds that at current production levels marginal cost is greater than
marginal revenue. What action should this firm take in order to pursue the maximization of profit?
✔✔Decrease the target output.
A competitive firm is characterized by ✔✔Trading of identical products.
Competitive firms experience marginal revenue that is: ✔✔Equal to price
n the short-run, a competitive firm would continue to produce under the following circumstance:
✔✔Total revenue exceeds total variable costs.
What fundamental shape does a demand curve take in a competitive market? ✔✔Horizontal
For a perfectly competitive firm which condition is true? ✔✔The demand curve is the same as the
marginal revenue curve.
Which condition is true for perfectly competitive firms in the long-run? ✔✔They will exit the
market if total revenue is less than total costs.
