Question

TRUE/FALSE
1. If marginal product is at a maximum, then marginal cost is at a minimum.
2. A firm's average fixed cost curve can never be U-shaped, even if its other average cost curves are U-shaped.
3. If a firm's average variable cost curve is rising, its marginal cost must exceed its average variable cost.
4. If a firm increases output and its average total cost rises, then the firm is experiencing economies of scale.
5. Diseconomies of scale occur when high levels of output are produced in a short period of time.

Answer 1

1. If marginal product is at a maximum, then marginal cost is at a minimum - false.
2. A firm's average fixed cost curve can never be U-shaped, even if its other average cost curves are U-shaped - true.
3. If a firm's average variable cost curve is rising, its marginal cost must exceed its average variable cost - true.
4. If a firm increases output and its average total cost rises, then the firm is experiencing economies of scale - false.
5. Diseconomies of scale occur when high levels of output are produced in a short period of time - false.