29) The Lawn Ranger, a landscaping company, has total costs of $4,000 and total variable costs of
$1,000. The Lawn Ranger's total fixed costs are
A) $0.
B) $3,000.
C) $5,000.
D) indeterminate because the firm's output level is not known.
30) Which of the following is most likely to be a variable cost for a firm?
A) the payroll taxes that are paid on employee wages
B) the interest payments made on loans
C) the monthly rent on office space that it leased for a year
D) the franchiser's fee that a restaurant must pay to the national restaurant chain
31) Engineers for The Giffen Record Company have determined that a 35% increase in all compact
disc inputs will cause a 45% increase in output. Assuming that input prices remain constant,
you correctly deduce that such a change will cause, as output increases.
A) average costs to decrease
B) average costs to increase
C) average costs to remain constant
D) marginal costs to increase
32) Which of the following statements is true?
A) In the short run, a firm cannot vary any of its inputs.
B) In the long run, a firm can vary all its inputs.
C) In the short run, a firm can vary all its inputs.
D) In the long run, a firm cannot vary any of its inputs.
33) Efficiency is achieved in competitive markets because ________
A) producer surplus is maximized
B) consumer surplus is maximized
C) social surplus is maximized (the economic pie is made as large as possible)
D) deadweight loss is maximized
