True or false: costs

Exercise and reference answers

Questions

1. Statement is true

   Yes

   Statement

   For every level of output the firm chooses the least cost input combination.

2. Statement is true

   Yes

   Statement

   Total variable cost is zero when output is zero.

3. Statement is true

   No

   Statement

   Total fixed cost rises as the firm produces more.

4. Statement is true

   Yes

   Statement

   A given level of output can usually be produced in more than one way.

Instructions

Decide whether each statement about costs is true or false.

Explanation