Economics Grade 11 Worksheet - Unit 4
1.
2.
3.
4.
5.
6.
7.
1.
2.
3.
4.
5.
6.
7.
1.
2.
3.
4.
5.
True or False
The shutdown point of a perfectly competitive firm in the short run corresponds to a point
where the market price is equal to average fixed cost. _____________________
The variability of an input depends on the length of time period under consideration.______________
Average product falls as long as the marginal product curve lies above the average product
curve.______________
When the total product begins to decline, marginal product becomes zero._______________
Overhead cost refers to the total cost incurred by the firm for the use of all fixed
factors._________________
In an inverse relationship between production and cost, average product and marginal product
are inversely related.____________________
The profitable stage of production for a rational firm is the stage I. _________________
Fill in the Blank / Short Answer
____________________ is the locus of points of isoquants where marginal product is zero.
____________________ is the cost that the society has to bear on account of production of a
commodity.
Fixed costs are also known as _______________________.
An isoquant is also known as ______________________, _____________________________,
__________________________.
___________________________________________ is the rate at which factors can be
substituted as the margin without altering the level of output.
What are the 3 types of curves we use for the analysis of the long-run cost of production?
Define the production function.
Workout
If with 9 units of output,average fixed cost is $15 and average variable cost is $50, then the total
cost at this output level is?
If a firm produces 50,000 units of headphones a year and sells them all for $50 each. The
explicit cost of production is 9,000,000 and the implicit cost is 30,000. How much is the firm’s
accounting profit?
If average fixed cost is 50 and total fixed cost is 450. What is the total unit of output?
The average product of 9 laborers is 450 units of a good and that of 10 workers is 460 units.
What is the marginal product of the 7th worker?
Java Express operates a number of espresso coffee stand in busy suburban malls. The fixed
weekly expense of a coffee stand is $1,500 and the variable cost per cup of coffee served is
$0.19. Estimate the total costs and average cost per cup of coffee at the indicated levels of
activity for a coffee stand. Round off the cost of a cup of coffee to the nearest cent.
6. A firm had sales revenue of $1 million last year. It spent $600,000 on labor, $150,000 on
capital and $200,000 on materials. What was the firm’s accounting profit?
7. A firm produces 200 units and the total cost of production is $4000. When they increase output
to 220, the cost rises to $4200. What is the marginal cost?