Use the Following to Answer Questions

question 2

Multiple Choice

Use the following to answer questions:
Figure: Marginal Benefits and Marginal Costs
-(Figure: Marginal Benefits and Marginal Costs) Look at the figure Marginal Benefits and Marginal Costs. More time spent studying economics adds points to economics scores (MB) but subtracts points from accounting scores (MC) . The marginal benefit of studying economics for two hours is _____ points, and the marginal cost is _____ points.

• A) 40; 0
• B) 30; 10
• C) 20; 20
• D) 10; 30

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Definitions:

Average Total Cost

The total cost of production (fixed plus variable costs) divided by the total quantity produced.

Output

Represents the total amount of goods and services produced by an economy over a specific period.

Average Variable Cost

The total variable costs (costs that change with the amount of output produced) divided by the quantity of output produced.

Fixed Cost

Costs that do not vary with the level of output or activity, such as rent or salaries.