Part $2$

a$.$

$$A$($n$)$

marginal cost

is the cost of making one more unit.

b$.$

Gasoline is one of many

variable costs

in the operation of a motor vehicle.

Part $3$

c$.$

A product's

fixed costs

and

variable costs

$,$ not the product's

average cost

$,$ should be used to

forecast total costs at different production volumes.

Part $4$

Part $5$

Part $6$

Part $7$

d$.$

The

marginal cost

per unit declines as a production facility produces more units.

e$.$

Costs that differ between alternatives are called

fixed costs

$.$

f$.$

In the long$$ run, most costs are

$$

$$

$,$

meaning management is able to influence or change the amount of the cost.

g$.$

$$

$$

Average costs

Controllable costs

Differential costs

Fixed costs

Marginal cost

Sunk costs

Uncontrollable costs

Variable costs

are costs that have already been incurred