A Firm Produces 400 Units of Output at a Total

question 248

Multiple Choice

A firm produces 400 units of output at a total cost of $1,200. If total variable costs are $1,000,

• A)average fixed cost is 50 cents.
• B)average variable cost is $2.
• C)average total cost is $2.50.
• D)average total cost is 50 cents.

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Definitions:

Seed Drill

An agricultural tool that sows the seeds for crops by positioning them in the soil and burying them to the correct depth, ensuring that seeds are distributed evenly and at optimal depths.

Experience

The knowledge or mastery of an event or subject gained through involvement in or exposure to it.

Productivity

The measure of the efficiency of production often calculated as the ratio of outputs produced to inputs used in the production process.

Constant Returns To Scale

Constant returns to scale occur when a proportional increase in all inputs leads to an equal proportional increase in output, implying efficiency in production.