7. (al (b) The law of diminishing marginal returns begins to operate when total product begins to rise. total product be

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7 Al B The Law Of Diminishing Marginal Returns Begins To Operate When Total Product Begins To Rise Total Product Be 1 (64.99 KiB) Viewed 56 times

7. (al (b) The law of diminishing marginal returns begins to operate when total product begins to rise. total product begins to fall. marginal product begins to rise. marginal product begins to fall (c) (d) (1 mark) 8. (a) (b) For a firm, how long is the long run? Long enough for all costs to become variable. Long enough for a firm to adjust only its variable inputs. Long enough for all costs to remain fixed. Long enough for the firm to make a profit. . (c) (d) (1 mark) 9. (a) Total cost is N$30 at 10 units of output and N$32 at 11 units of output. In this range of output, marginal cost is greater than average (total) cost. . equal to average (total) cost. ) less than average (total) cost. ( indeterminate with the information provided. . (1 mark) (b) (c) (d) 10. (a) (b) Average fixed cost equals the vertical distance between the average (total) cost curve and marginal cost curve. average (total) cost curve and the average variable cost curve, average variable cost curve and the marginal cost curve. none of the above. (c) (d) (1 mark) 11. A firm supplies 6 units of a product at a total cost of N$60 and supplies 7 units at a total cost of N$72. The marginal cost of the 7 unit is thus N$12. (a) (b) N$132 (c) N$1. 18 (d) N$10. (1 mark) 12. . (a) (b) In the long run, a firm experiences diseconomies of scale when rising levels of production allow its average cost to decrease. the labour force becomes sufficiently large to allow specialisation. it is too small to benefit from the introduction of a new technology. it becomes too large to manage efficiently, with the result that its average cost increases as production increases. (1 mark) (c) (d) 13. A firm obtains total revenue of N$150 by selling 5 units and total revenue of N$170 by selling 6 units. The marginal revenue of the 6th unit is thus (a) N$10 (b) b NS6 (c) N$20 (d) N$1 (1 mark)