Question

1. The law of diminishing returns implies that at some output level:
a) Marginal cost must fall
b) Average total cost must diminish
c) profit increases
d) Marginal cost must rise
e) Total cost must fall

2. The vertical distance between total cost curve and total variable cost curve is equal to:
a) Total fixed cost
b) Average Variable cost
c) Marginal Cost
d) Average variable cost
e) Average total cost