DP Economics Questionbank

Using information from Figure 1, calculate Firm A’s total fixed costs.

Define the term variable costs indicated in bold in the text (paragraph [7]).

Using an average costs diagram, explain the short-run consequence for shrimp farmers if the price received “is not enough to cover their variable costs” (paragraph [7]).

Using the figures provided in Table 1, calculate the monthly level of profits Firm A is making at the current level of output, Q’.

Using the relationship P = AR > MR > AC > MC and/or figures provided in Table 1:

Describe how average cost will be affected if Firm A increases its level of output.

Define the term marginal cost indicated in bold in the text (paragraph 4).

Calculate the firm’s total variable costs if output is 20 000 widgets per month.

Calculate the firm’s monthly total fixed costs if output equals 50 000 units per month.

Using Figure 2, calculate the total costs when 55 cans per month are produced.

Calculate Firm A’s average fixed costs when it is producing 125 cartons of coffee per month.

Calculate Firm A’s average variable costs when it is producing 125 cartons of coffee per month.

Using Figure 2, calculate the average fixed costs when 80 cans per month are produced.

Define the term variable costs indicated in bold in the text (paragraph [4]).

Using a fully labelled diagram, outline the relationship between marginal product (MP) and average product (AP) of labour.