Econ Final Ch. 8
Refer to the table to the right which shows cost data for Lotus Lanterns, a producer of whismsial night lights. What is the total variavle cost of production when the firm produces 115 lanterns?
$1,157
Refer to the table to the right which shows cost data for Lotus Lanterns, a producer of whimsical night lights. What is the average total cost of production when the firm produces 120 lanterns?
$14
If the marginal cost curve is below the average variable cost curve, then
average variable cost is decreasing
The average total cost of production
equals total cost of production divided by the level of output.
Average fixed costs of production
falls as long as output is increased
A firm has successfully adopted a positive technological change when
it can produce more output using the same inputs.
Which of the following is not a source of technological advancement for a producer?
outsourcing some aspect of production
When a firm produces 50,000 units of output, its total cost equals $6.5 million. When it increases its production to 70,000 units of output, its total cost increased to $9.4 million. Within this range, the marginal cost of an aditional unit of output is
$145
The figure to the right shows the cost structure for a firm. When output level is 100, what is the total cost of production?
$2,000
Refer to the table to the right which shows cost data for Lotus Lanterns, a producer of whimsical night lights. What is the marginal cost per unit of production when the firm produces 100 lanerns
$32
Vipsana's Gyros House sells gyros. The cost of ingredients (pita, meat, spices, etc.) to make a gyro is $2.00. Vipsana pays her employees $60 per day. She also incurs a fixed cost of $120 per day. Calculate Vipsana's total cost per day where she produces 50 gyros using two workers?
$340
Golda Rush quit her job as a manager for Home Depot to start her own hair dressing salon, Goldilocks.
$41,500
Golda Rush quit her Job as manager from home depot to start her own hair dressing salon, Goldilocks.
$45,500
The figure to the right shows the cost structure for a firm. When the output level is 100 units average fixed cost is
$8
Refer to the table to the right which shows the technology of production at the Matsuko's Mushroom Farm for the month of May. What is the average product of labor when the farm hires 5 workers?
10.8 bushels
Refer to the diagram to the right. The marginal product of the 3rd worker is
15
Refer to the diagram to the right. The average product of the 4th worker
17
Refer to the table to the right which shows the technology of production at the Matsuko's Mushroom Farm for the month of May. Diminishing marginal returns sets in when the ______ worker is hired.
3rd
Refer to the table to the right which shows the technology of production at the Matsuko's Mushroom Farm for the month of May. What is the marginal production of the 4th worker?
5 pounds
If 11 workers can produce a total of 54 units of a product and a 12th worker has a marginal product of 6 units, then the average product of 12 workers is
5 units
Which of the following is correct?
AFT+AVC= ATC
Which of the following is a reason why a firm would experience diseconomies of scale
As the size of the firm increases it becomes more difficult to coordinate the operations of its manufacturing plants.
Refer to the diagram to the right. Identify the curves in the diagram.
E=marginal cost curve; F=total cost curve; G= average variable cost curve; H= average fixed cost curve
Which of the following explains why the marginal cost curve has a U shape?
Initially, the marginal product of labor rises, then falls.
Which of the following statements best describes the economic short run?
It is a period during which at least one of the firm's inputs is fixed.
Refer to the diagram to the right. Identify the minimum efficient scale of production.
Qb
Marginal cost is the
additional cost of producing an additional unit of output.
Refer to the diagram to the right. Diminishing returns to labor set in
after L1
Refer to the diagram to the right. The verticle difference between curves F and G measures
average fixed cost
If production displays economies of scale, the long run average cost curve is
downward-sloping
Economics cost of production differ from accounting costs in that
economic cost adds the opportunity cost of a firm using its own resources while accounting cost does not.
If, when a firm doubles all its inputs, its average cost of production decreases, then production displays
economics of scale
Which of the following is an implicit cost of production?
rent that could have been earned on a building owned and used by the firm
The law of diminishing marginal returns states
that at some point, adding more of a variable input to a given amount of a fixed input, will cause the marginal product of the variable input to decline.
Refer to the diagram to the right. Diminishing marginal productivity sets in after
the 2nd worker is hired.
The marginal product of labor is defined as
the additional output that results when one more worker is hired, holding all other resources constant.
Refer to the diagram to the right. The curve labeled "E" is
the marginal product curve
Refer to the diagram to the right. The average product of labor declines after L2 because
the marginal product of labor is below the average product of labor
The production function shows
the maximum output that can be produced from each possible quantity of inputs
The basic activity of a firm is
to use inputs to produce outputs of goods and services.
