1. Microeconomics

Production Costs — Quiz

Test your understanding of production costs with 5 practice questions.

Practice Questions

Question 1

Given the total cost function $TC(Q)=100+20Q+4Q^2$, at what output level $Q$ is the average cost minimized?

Question 2

A firm’s long-run total cost is given by $LRTC(Q)=8Q^{1.2}$. What type of returns to scale does the firm experience?

Question 3

Why is the long-run average cost curve (LRAC) described as the lower envelope of short-run average cost (SRAC) curves?

Question 4

At the output where the long-run marginal cost (LRMC) curve intersects the LRAC curve, what condition holds?

Question 5

When a per‐unit tax $t$ is imposed on output in the short run, which cost curves shift and how?