AP Microeconomics : Cost Curves Quiz

Quiz
*Theme/Title:	Cost Curves
* Description/Instructions
The major cost curves in AP Microeconomics are the marginal cost, average total cost, average variable cost, and average fixed cost. These curves used along with the price curve determine price and quantity in the market. Marginal cost is ΔTC/ΔQ; Average Total Cost, ATC, equals TC/Q; Average variable cost, AVC, equals VC/Q; average fixed cost FC/Q. Because you are not allowed to use a calculator on the AP exam, the College Board expects you to understand the relationships among the curves. One relationship exists between the marginal product curve and the marginal cost curve. The two curves are inversely related to each other. That is, when marginal product is rising, marginal cost is falling. When marginal product is falling, marginal cost is rising. This relationship relates output to cost. As diminishing marginal returns set in, the cost of employing the next resource increases. The table below shows Perky Dry cleaners costs related to washing towels for a spa. Refer to the Table I to answer questions 1, 2, 3, 4, and 7.
Group:	AP Microeconomics AP Microeconomics Quizzes
Topic:	AP Microeconomics

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