Microeconomics

Table of Contents

1. Topic pack - Microeconomics - introduction
2. 1.1 Competitive Markets: Demand and Supply
3. 1.1 Competitive Markets: Demand and Supply - notes
4. 1.1 Competitive markets - questions
5. 1.1 Competitive markets - simulations and activities
6. 1.2 Elasticities
7. 1.2 Elasticities - notes
8. Section 1.2 Elasticities - questions
9. Section 1.2 Elasticities - simulations and activities
10. 1.3 Government intervention
11. 1.3 Government Intervention - notes
12. 1.3 Government intervention - questions
13. 1.3 Government intervention - simulations and activities
14. 1.4 Market failure
15. 1.4 Market failure - notes
16. Section 1.4 Market failure - questions
17. Section 1.4 Market failure - simulations and activities
18. 1.5 Theory of the firm
19. 1.5 Theory of the firm - notes (HL only)
20. Section 1.5 Theory of the firm - questions
21. Section 1.5 Theory of the firm - simulations and activities
    1. DragIT - fixed cost curve
    2. DragIT - variable cost curve
    3. DragIT -cost curves
    4. Step-by-step - Short-run total cost curve
    5. DragIT -revenue curve
    6. DragIT - Revenue curves (1)
    7. DragIT - Revenue curves (2)
    8. PlotIT - Profit maximisation
    9. DragIT - Perfect competition
    10. Step-by-step - perfect competition, short-run supernormal profit
    11. Step-by-step - perfect competition, short-run losses
    12. Step-by-step - perfect competition, firm and industry
    13. DragIT - Monopoly (1)
    14. DragIT - Monopoly (2)
    15. Step-by-step - monopoly
    16. DragIT - Welfare loss under monopoly
    17. Step-by-step - monopolistic competition, short-run
    18. Step-by-step - monopolistic competition, short-run
22. Print View

DragIT - fixed cost curve

In the simulation below, drag the slider to see the impact of changes in fixed costs on the fixed cost curve.

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• Changes in fixed costs

1

Fixed cost changes Select all the changes below that will result in the fixed cost curve shifting vertically upwards. a) An increase in rent b) Lower insurance payments c) Increased wage rates for production line staff d) Higher fuel costs for delivery vehicles e) Higher security costs for company premises f) Higher business rates (local taxes) for the business premises a) This will shift the fixed cost curve upwards. An increase in rent will increase fixed costs as rents do not generally change with the level of output.a) This will shift the fixed cost curve upwards. Rent is generally considered a fixed cost as it doesn't change with output. An increase in rent will therefore shift the fixed cost curve vertically upwards.b) This will shift the fixed cost curve downwards. Though insurance payments are generally considered a fixed cost, a decrease in insurance payments will shift the fixed cost curve downwards.b) This will shift the fixed cost curve downwards. Though insurance payments are generally considered a fixed cost, a decrease in insurance payments will shift the fixed cost curve downwards.c) This is a change in variable cost. Wages for production staff are generally considered variable costs as they increase with output.c) This is a change in variable cost. Wages for production staff are generally considered variable costs as they increase with output, so changes in wages will not affect the fixed cost curve.d) This is a change in variable cost. Fuel costs for delivery vehicles are generally considered variable costs as they increase with output.d) This is a change in variable cost. Fuel costs for delivery vehicles are generally considered variable costs as they increase with output, so changes in fuel costs will not affect the fixed cost curve.e) This will shift the fixed cost curve upwards. Security costs will generally be considered fixed costs and so higher security costs will shift the fixed cost curve vertically upwards.e) This will shift the fixed cost curve upwards. Security costs will generally be considered fixed costs as they don't vary with output and so higher security costs will shift the fixed cost curve vertically upwards.f) This will shift the fixed cost curve upwards. Business rates will generally be considered fixed costs and so higher business rates will shift the fixed cost curve vertically upwards.f) This will shift the fixed cost curve upwards. Business rates will generally be considered fixed costs as they don't vary with output and so higher business rates will shift the fixed cost curve vertically upwards.