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Wize University Microeconomics Textbook > Production and Costs

Fixed Costs and Variable Costs

3 Activities

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Mark Yourself Question
  1. Grab a piece of paper and try this problem yourself.
  2. When you're done, check the "I have answered this question" box below.
  3. View the solution and report whether you got it right or wrong.
Tony sells furniture. He pays $1,200 month to rent a warehouse and has a 3 year lease. Each day he has one friend Jerry whom he pays $100 to help him sell the furniture. Jerry sells on 200 units of furniture a month.

What is the fixed cost for one month?


What is the variable cost per month?


What is the average cost per month?

More Fixed Costs and Variable Costs Questions:
When marginal product is rising, which of the following is true?
Which of the above curves is the marginal product curve?
In the short-run capital is ___________ and labour is ___________ while in the long-run capital is ___________ and labour is ___________.
In the short run, a firm can vary
In the short run, a firm can vary
Factors of Production
The factors of production are
True/False:
When 
average total cost is falling, marginal cost must be
Suppose Thor's hammer makers increases its output from 20 to 25 hammers. Its total cost increase from $500 to $750. What is the the company's marginal cost of producing a hammer?
Fixed and Variable Costs
In the long run
In the short run
.
Practice: Marginal Product
John makes 2 pizzas and then we add Eric and he makes 1 pizza. Each of them is paid $10.