ECON 341 HW 8
2 A fixed cost is
a cost the firm must pay even if output is zero.
Marginal cost
both b and c
The marginal product of labor
both b and c
Based on the following table, what is total variable cost when 100 units of output are produced? Picture
none of the above
Given the table below, how much does the 13th worker add to total output? Picture
none of the above
In the table above, how much does the third unit of labor ADD to total output?
none of the above
A production function measures the relation between
the quantity of inputs and the quantity of output.
In the above figure, what is the TOTAL cost of producing 5 units of output?
$100
A short-run production function assumes that
at least one input is a fixed input.
Picture Above is a firm's average product of labor and marginal product of labor curves. The price of labor is $60 per unit. When the firm uses 6 units of labor, what is marginal cost?
$5
Suppose a firm is hiring 20 workers at a wage rate of $60. The average product of labor is 30, the last worker added 12 units of output, and total fixed cost is $3,600. What is marginal cost?
$5
Picture In the figure above, the wage rate is $600 and total fixed cost is $15,000. When there are 40 workers, what is average variable cost?
$5.00
Given the table below, what is the total fixed cost when 400 units of output are produced? Picture
$500
The capital stock is fixed at 5 units, the price of capital is $60 per unit, and the price of labor is $20 per unit. Picture Based on the above, if the firm produces 80 units of output, what is its total cost of production?
$540
The following graph shows the marginal and average product curves for labor, the firm's only variable input. The monthly wage for labor is $2,800. Fixed cost is $160,000. Picture When the firm uses 120 units of labor, what is its marginal cost at this output?
$56
The following graph shows the marginal and average product curves for labor, the firm's only variable input. The monthly wage for labor is $2,800. Fixed cost is $160,000. Picture When the firm uses 120 units of labor, what is average total cost at this output?
$59
Given the table below, what is the marginal cost of the 250th unit of output? Picture
$7.40
The capital stock is fixed at 50 units, the price of capital is $30 per unit, and the price of labor is $25 per unit. Picture Given the above, how much does the 23rd unit of output add to the firm's total cost?
$75
Fill out the table and answer the question below. Picture The average product of labor when 4 units of labor are employed is
19
A firm is using a single variable input, labor, with a given amount of a fixed input, capital. If the level of capital is decreased,
all of the above
A short-run cost function assumes that
at least one input is fixed in supply.
Use the following table to answer the question below: The amount of total output produced from various combinations of labor and capital. Picture If the amount of labor used increases from three to four units, the marginal product of the second unit of capital
increases by 8 units.
If average product is increasing, then marginal product
must be greater than average product.
Given the table below, what is average fixed cost when 300 units of output are produced? Picture
none of the above
Short-run average cost is
none of the above
Use the following table to answer the question below: The amount of total output produced from various combinations of labor and capital. Picture If the capital stock is fixed at four units and there are three units of labor, what is the average product of labor?
none of the above
If marginal product is decreasing, then it must be the case that
none of the above.
Given the table below, if capital is fixed at one unit, diminishing returns begin with the Picture Amount of total output produced from various combinations of labor and capital.
third unit of labor.
Average fixed cost
decreases as output increases.
In the table below, the capital stock is fixed at 40 units, the price of capital is $15 per unit, and the price of labor is $80 per unit. Picture If the firm produces 180 units of output, what is total variable cost?
$1,200
Based on the following table, what is average fixed cost when 200 units of output are produced? Picture
$1.50
Suppose that the firm's only variable input is labor. When 50 workers are used, the average product of labor is 50 and the marginal product of labor is 75. The wage rate is $80 and the total cost of the fixed input is $500.What is average variable cost?
$1.60
Based on the following table, what is average fixed cost when 150 units of output are produced? Picture
$2
The capital stock is fixed at 50 units, the price of capital is $30 per unit, and the price of labor is $25 per unit. Picture Given the above, if the firm produces 40 units of output, what is total variable cost?
$2,400
The capital stock is fixed at 5 units, the price of capital is $60 per unit, and the price of labor is $20 per unit. Picture Based on the above, how much does the 12th unit of output add to the firm's total variable cost?
$2.50
The capital stock is fixed at 5 units, the price of capital is $60 per unit, and the price of labor is $20 per unit. Picture Based on the above, if the firm produces 60 units of output, what is average variable cost?
$2.67
A firm produces 4,000 units of output using 500 workers. Marginal cost is $10, the wage rate is $160, and total fixed cost is $100,000. What is average variable cost? $0.32
$20
The following graph shows the marginal and average product curves for labor, the firm's only variable input. The monthly wage for labor is $2,800. Fixed cost is $160,000. Picture When the firm uses 40 units of labor, what is marginal cost at this level of output?
$35
A firm is currently producing 10 units of output; marginal cost is $24 and average total cost is $6 at this level of output. The average total cost at 9 units of output is:
$4
Given the table below, what is average total cost when 200 units of output are produced? Picture
$4.80
The following graph shows the marginal and average product curves for labor, the firm's only variable input. The monthly wage for labor is $2,800. Fixed cost is $160,000. Picture When the firm uses 120 units of labor, what is its AVC at this output?
$40
Based on the following table, the additional cost of producing the 60th unit of output is: Picture
$5
In the table below, the capital stock is fixed at 40 units, the price of capital is $15 per unit, and the price of labor is $80 per unit. Picture How much does the 50th unit of output add to the firm's total cost?
$6.67
Suppose a firm is hiring 20 workers at a wage rate of $60. The average product of labor is 30, the last worker added 12 units of output, and total fixed cost is $3,600. What is average total cost?
$8
Suppose you run a pizza shop and currently have two employees. If you hire a third employee, your output of pizzas per day rises from 55 to 65. If you hire a fourth employee, output rises to 80 per day. A fifth and sixth employee would cause output to rise to 90 and 95 per day, respectively. Pick the correct statement:
Diminishing returns set in with the hiring of the fifth worker.
Which of the following statements is FALSE?
In the short run all inputs are fixed.
Picture In the table above, what is the marginal product of the fifth unit of labor?
-30
The following graph shows the marginal and average product curves for labor, the firm's only variable input. The monthly wage for labor is $2,800. Fixed cost is $160,000. Picture When the firm uses 40 units of labor, how much output does it produce?
1,600 units
If labor is fixed at 5 units, how much does the second unit of capital add to total output? Picture Amount of total output produced from various combinations of labor and capital.
100
Given the table below, diminishing returns begin with the Picture
11th worker.
A firm produces 4,000 units of output using 500 workers. Marginal cost is $10, the wage rate is $160, and total fixed cost is $100,000.What is the marginal product of labor?
16 units of output per worker
Picture In the table above, what is the maximum amount of output that can be produced with two workers?
250
Picture In the figure above, the wage rate is $600 and total fixed cost is $15,000. How much output does the firm produce when average variable cost is at its minimum?
4,800
Fill out the table and answer the question below. Picture The marginal product of the fifth unit of labor is
4.
Use the following table to answer the question below: The amount of total output produced from various combinations of labor and capital. Picture If the capital stock is fixed at one unit, how much does the third unit of labor add to total output?
40
Given the table below, the maximum amount that can be produced using 20 workers is Picture
530 units.
Above is a firm's average product of labor and marginal product of labor curves. The price of labor is $60 per unit. Given this, diminishing returns set in with the
6th unit of labor.
The following graph shows the marginal and average product curves for labor, the firm's only variable input. The monthly wage for labor is $2,800. Fixed cost is $160,000. Picture At what output does the firm reach minimum average variable cost?
8,000
The following graph shows the marginal and average product curves for labor, the firm's only variable input. The monthly wage for labor is $2,800. Fixed cost is $160,000. Picture When the firm uses 120 units of labor, how much output does it produce?
8,400 units
Suppose that the firm's only variable input is labor. When 50 workers are used, the average product of labor is 50 and the marginal product of labor is 75. The wage rate is $80 and the total cost of the fixed input is $500. Which of the following is true?
Average variable cost is decreasing.
In the figure above, the wage rate is $600 and total fixed cost is $15,000. What is average variable cost at its minimum?
$3.75
The following graph shows the marginal and average product curves for labor, the firm's only variable input. The monthly wage for labor is $2,800. Fixed cost is $160,000. Picture What is AVC at its minimum?
$35
Picture In the table above, what is the average product of four units of labor?
80
Use the following table to answer the question below: The amount of total output produced from various combinations of labor and capital. Picture If the amount of capital increases from 3 to 4 units, the marginal product of the fourth unit of labor
increases by 5 units.
Fill out the table and answer the question below. Picture Diminishing returns begin with the
third unit of labor.
To answer, refer to the following: "At Huffy's ... bicycle factory, 1,700 employees turn out 15,000 bicycles a day (in 1987). Five years before, it required 2,200 workers to make 10,000 bikes daily." (The Wall Street Journal). In 1987,
both a and b
A firm produces 4,000 units of output using 500 workers. Marginal cost is $10, the wage rate is $160, and total fixed cost is $100,000.When output is 4,000 units,
both a and c
If a firm is producing a given level of output in an economically efficient manner, then it must be the case that
both a and c
Use the following table to answer the question below: The amount of total output produced from various combinations of labor and capital. Picture Diminishing marginal productivity
both a and c
Fill out the table and answer the question below. Picture Marginal product is negative when _____ units of labor are employed.
both b and c.
To answer, refer to the following: "Ford built 18 vehicles per auto employee in North America last year, while GM could only manage 12." (The Wall Street Journal) In comparison with GM, Ford had
lower average variable cost.
Diminishing returns refers to the decrease in
marginal product that results from increases in the variable input.
Given the table below, if capital is fixed at two units, what is the marginal product of the fourth unit of labor? Picture Amount of total output produced from various combinations of labor and capital.
none of the above
In the table below, the capital stock is fixed at 40 units, the price of capital is $15 per unit, and the price of labor is $80 per unit. Picture If the firm produces 40 units of output, what is average fixed cost?
none of the above
Suppose that the firm's only variable input is labor. When 50 workers are used, the average product of labor is 50 and the marginal product of labor is 75. The wage rate is $80 and the total cost of the fixed input is $500.What is the marginal cost?
none of the above
The capital stock is fixed at 50 units, the price of capital is $30 per unit, and the price of labor is $25 per unit. Picture Given the above, if the firm produces 20 units of output, what is average fixed cost?
none of the above
In the above figure, what is the AVERAGE total cost of producing 10 units of output?
$12
In the above figure, what is the AVERAGE variable cost of producing 5 units of output?
$12
The following graph shows the marginal and average product curves for labor, the firm's only variable input. The monthly wage for labor is $2,800. Fixed cost is $160,000. Picture When the firm uses 40 units of labor, what is average total cost at this output?
$170
Use the following table to answer the question below: The amount of total output produced from various combinations of labor and capital. Picture If labor is fixed at three units, how much does the second unit of capital add to total output?
210
Use the following table to answer the question below: The amount of total output produced from various combinations of labor and capital. Picture Which of the following input combinations can produce the same level of output?
2K, 3L and 4K, 2L
Suppose that the firm's only variable input is labor. When 50 workers are used, the average product of labor is 50 and the marginal product of labor is 75. The wage rate is $80 and the total cost of the fixed input is $500. Suppose that installation of a new assembly line increases the output produced per worker. The cost per unit of output
will decrease.
The capital stock is fixed at 50 units, the price of capital is $30 per unit, and the price of labor is $25 per unit. Picture Given the above, if the firm produces 30 units of output, how many units of labor does the firm use?
54
Given the table below, if labor is fixed at three units, how much does the third unit of capital add to total output? Picture Amount of total output produced from various combinations of labor and capital.
60
For a short-run production function in which output is determined by the number of workers utilized (capital stock held constant), which of the following is FALSE?
When diminishing returns set in, adding one more worker decreases output.
To answer, refer to the following: "Ford built 18 vehicles per auto employee in North America last year, while GM could only manage 12." (The Wall Street Journal) In comparison with GM, Ford had a higher
average product of labor.
A firm's cost of production is affected by changes in
both a and b
Use the following table to answer the question below: The amount of total output produced from various combinations of labor and capital. Picture If capital is fixed at three units, how much does the fourth unit of labor add to total output?
none of the above
Suppose that you run a house-painting company and currently have 2 workers painting a total of 4 houses per month. If you hire a third worker, 6 houses can be painted per month. If you hire a fourth worker, 9 houses can be painted, and a fifth and sixth worker will increase the number of houses painted to 13 and 15, respectively. Diminishing returns
set in when the sixth worker is hired.
Use the following table to answer the question below: The amount of total output produced from various combinations of labor and capital. Picture If the capital stock is fixed at one unit, diminishing returns begin with the
third unit of labor.
If a firm is producing a given level of output in a technically efficient manner, then it must be the case that
this output level is the most that can be produced with the given levels of inputs.
Average total cost
increases if marginal cost is greater than average total cost.
Suppose that the firm's only variable input is labor. When 50 workers are used, the average product of labor is 50 and the marginal product of labor is 75. The wage rate is $80 and the total cost of the fixed input is $500. What is average total cost?
$1.80
Picture Above is a firm's average product of labor and marginal product of labor curves. The price of labor is $60 per unit.When the firm uses 4 units of labor, what is AVERAGE variable cost?
$10
Based on the following table, what is average variable cost when output is 200? Picture
$10.50
Based on the following table, the additional cost of producing the 170th unit of output is: Picture
$15
The following graph shows the marginal and average product curves for labor, the firm's only variable input. The monthly wage for labor is $2,800. Fixed cost is $160,000. Picture When the firm uses 40 units of labor, what is AVC at this level of output?
$70
To answer, refer to the following: "At Huffy's ... bicycle factory, 1,700 employees turn out 15,000 bicycles a day (in 1987). Five years before, it required 2,200 workers to make 10,000 bikes daily." (The Wall Street Journal). Holding all else equal, we can conclude that, over those years,
Huffy's average variable cost decreased.
In the table above, diminishing returns
begin with the third unit of labor.
Given the table below, as the number of workers increases from 10 to 15, output per worker Picture
decreases from 29 to 28