Given the Following Information About the Cost Function for Bob's

question 43

Multiple Choice

Given the following information about the cost function for Bob's Beautiful Bowling Balls: $\begin{array}{c}\begin{array}{lc}\text { Out put } &\text { Total } \\&\text { Fixed } \\&\text { Costs }\\1 & 10 \\2 & \\3 & \\4 & \\5 & \\6 & \\7 & \\8 & \end{array}\begin{array}{c}\text { Total }&\text { Total } \\\text { Variable }&\text { Costs } \\ \text { Costs } &\\60 & \\& 100 \\& 120 \\& 128 \\& 180 \\& 252 \\& 316 \\& 436 \end{array}\begin{array}{cccc}\text { Average } & \text { Average } & \text { Average } & \text { IMargina } \\\text { Fixed } & \text { Variable } & \text { Total } & \text { Cost } \\\text { Cost } & \text { Cost } & \text { Cost } & \\\\\\\\\\\\\\\\\\\end{array}\end{array}$
Which of the following is true?

• A)The average fixed cost of producing 3 units is $200.
• B)The total cost of producing 5 units is $230.
• C)The marginal cost of the 4^th unit is lower than for any other unit.
• D)AVC falls through the first five units of output.
• E)None of the above is true.

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Definitions:

Pearson Correlation

A statistical coefficient expressing the degree of linear relationship between two variables, measured on a scale from -1 to 1.

Ranking Data

A method of organizing data by assigning an ordinal or rank order to different values based on their size or importance.

Sample Spearman

Sample Spearman refers to the computation of Spearman's rank correlation coefficient on a sample data set to assess the monotonic relationship between two variables.

Rank Coefficient

A statistical measure that evaluates the strength and direction of a relationship between two ranked variables.