MODULE 19

Name: LENI KIKO PANGILINAN Class Number: BLOCK 3

Section: BSA 1-COC Schedule: 8 AM – 11 AM Date: MARCH 28, 2022

Activity 4: What I Know Chart (2min)

Finally, you’ve learned a lot about our topic today. I know you’re excited to revisit your answer on
Activity 1 and enhance them. Go back to Activity 1 and fill out the third column.

Questions: What I Learned

1.What are the I’ve learned that in
components of the short run, there
Short-run costs and are both fixed and
long-run costs? variable costs.
In the long run,
there are no fixed
costs; all are treated
as variable cost.
2.What is the I’ve learned that
difference between Variable costs are
variable and fixed any expenses that
costs? change based on
how much a
company produces
and sells. This means
that variable costs
increase as
production rises and
decrease as
production falls.
Some of the most
common types of
variable costs
include labor, utility
expenses,
commissions, and
raw materials. Fixed
costs, on the other
hand, are any
expenses that
remain the same no
matter how much a
company produces.
These costs are
normally
 independent of a
company's specific
business activities
and include things
like rent, property
tax, insurance, and
depreciation.

Activity 5: Check for Understanding (15min)

Direction: Write the letter of your answer on the space before the given number.

1. The short run is a time period in which:

A) All resources are fixed.
B) The level of output is fixed.
C) The size of the production plant is variable.
D) Some resources are fixed and others are variable.
2. The law of diminishing returns states that:
A) As a firm uses more of a variable resource, given the quantity of fixed resources, page 2
the average product of the firm will increase.
B) As a firm uses more of a variable resource, given the quantity of fixed resources,
marginal product of the firm will eventually decrease
C) In the short run, the average total costs of the firm will eventually diminish.
D) In the long run, the average total costs of the firm will eventually diminish.
3. Variable costs are:
A) Sunk costs.
B) Multiplied by fixed costs.
C) Costs that change with the level of production.
D) Defined as the change in total cost resulting from the production of an additional unit of
output.
4. Which is not a fixed cost?
A) Monthly rent of $1,000 contractually specified in a one-year lease
B) An insurance premium of $50 per year, paid last month
C) An attorney’s retainer of $50,000 per year page 3
D) A worker’s wage of $15 per hour
5. If the short-run average variable costs of production for a firm are rising, then this indicates that:
A) Average total costs are at a maximum.
B) Average fixed costs are constant.
C) Marginal costs are above average variable costs.
D) Average variable costs are below average fixed costs.
6. An example of a variable resource in the short run is
A) An employee. B) capital equipment.
B) Land. D) a building.
7. The long run is distinguished from the short run in that, in the long run,
A) Output prices can vary.
B) The firm no longer maximizes its profit.
C) Resource prices can vary.
D) The quantities of all resources can be varied.
8. A firm has fixed costs
A) In the short run but not in the long run.
B) In the long run but not in the short run.
C) In the short run and in the long run.
D) Neither in the long run nor in the short run.
9. Marginal cost is
A) All the costs of production of goods.
B) All the costs of the fixed inputs.
C) The change in the total cost resulting from a one-unit change in output.
D) All the costs that vary with output.
10. Average total costs are
A) The change in output divided by the change in total costs.
B) Total costs divided by total output.
C) The change in total costs divided by the change in output.
D) Total output divided by total costs.