Use the Following to Answer Questions -(Table: Costs of Birthday Cakes)Use Table: Costs of Birthday Cakes

question 10

Multiple Choice

Use the following to answer questions : $$\begin{array}{l}\text { Table: Costs of Birthday Cakes }\\\begin{array} { c c } \hline \text { Quantity of cakes } & \text { Variable cost, } \boldsymbol { V C } \\\hline 0 & 0 \\1 & 15 \\2 & 25 \\3 & 30 \\4 & 38 \\5 & 50 \\6 & 70 \\\hline\end{array}\end{array}$$
-(Table: Costs of Birthday Cakes) Use Table: Costs of Birthday Cakes.Assume that fixed costs are $10.What is the average fixed cost of five cakes?

• A) $1
• B) $2
• C) $5
• D) $10

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Definitions:

Diminishing Marginal Product

The principle where the incremental output of a production process decreases as the amount of a single factor of production is incrementally increased, holding all other factors constant.

Inverted Production Function

A concept where inputs and outputs in a production process are reversed in analysis, possibly examining the relationship of output levels to required inputs.

Total Product

The overall quantity of output that a firm produces, usually within a given period of time.

Marginal Product

The rise in output due to an extra unit of input.