UNit 3 Application Assignment.

Suppose the total cost of producing 5,000 tennis balls is ​$30,000​, and the fixed cost is ​$20, 000. What is the variable​ cost? ​

$10000 = $30,000 - $20,000

A company that provides​ home-care for the elderly is able to provide monthly services for 4 patients at a total cost of ​$2,000 and monthly services for 5 patients at a cost of ​$2,400. What is the marginal cost of providing monthly services for a 5th ​patient?

400 = 2400 - 2000

An example of technological change is

A. being able to produce more output using the same inputs. B. being able to produce the same output using fewer inputs. C. a decline in the quantity of output that can be produced from a given quantity of inputs. D. both a and b. *E. all of the above.*

What is the difference between the average cost of production​ (ATC) and marginal cost of production​ (MC)?

ATC = TC /Q ; MC = [DELTA] TC / Q .

The law of diminishing returns states that: Does it apply in the Long Run?

Adding more of a variable input to the same amount of a fixed input will eventually cause the marginal product of the variable input to decline. No

As the level of output​ increases, what happens to the value of average fixed​ cost?

Average fixed cost decreases .

A hospital provides​ emergency-room medical care for local residents. Suppose the hospital currently provides this care for​ 15,000 patients per year at a total cost of ​$30,000,000 If the hospital​ expands, it can provide​ emergency-room medical care for​ 20,000 patients per year at a total cost of ​$90000000. If the hospital​ expands, will it be experiencing economies of​ scale, diseconomies of​ scale, or constant returns to​ scale?

Diseconomy of Scale (check values )

What is the difference between the short run and the long​ run? Is the amount of time that separates the short run from the long run the same for every​ firm?

In the short run, at least one of a​ firm's inputs is​ fixed, while in the long​ run, a firm is able to vary all its inputs and adopt new technology. No

Is it possible for technological change to be​ negative? If​ so, give an example.

It is possible for technological change to be negative. An example is when It a hurricane damages a firm's facilities.

Southwest signs a new contract with the Transport Workers Union that requires the airline to increase wages for its flight attendants.

Marginal cost would increase ​, average variable cost would increase ​, average fixed cost would remain unchanged ​, and average total cost would increase .

The federal government starts to levy a​ $20 per passenger carbon emissions tax on all commerical air travel. .

Marginal cost would increase ​, average variable cost would increase ​, average fixed cost would remain unchanged ​, and average total cost would increase .

Southwest decides on an​ across-the-board 10 percent cut in executive salaries. .

Marginal cost would remain unchanged ​, average variable cost would remain unchanged ​, average fixed cost would decrease ​, and average total cost would decrease .

Southwest decides to double its television advertising budget.

Marginal cost would remain unchanged ​, average variable cost would remain unchanged ​, average fixed cost would increase ​, and average total cost would increase

Southwest decides on an​ across-the-board 10 percent increase in executive salaries.

Marginal cost would remain unchanged ​, average variable cost would remain unchanged ​, average fixed cost would increase ​, and average total cost would increase .

Your company incurs a cost for machinery​, ​which, in the short​ run, is fixed. What happens to this cost in the long​ run? In the long​ run, the cost of machinery

becomes a variable cost.

A​ firm's production function is best described as

illustrating the relationship between inputs and the maximum amounts of output that the firm can produce with these inputs.il

What does the​ short-run production function hold​ constant? A​ short-run production function holds constant :

the amount of capital.

Minimum efficient scale is What is likely to happen in the long run to firms that do not reach minimum efficient​ scale? A firm that does not reach its minimum efficient scale

the level of output at which all economies of scale are exhausted. or the level of output at which the long - run average cost of production no longer decreases with output will lose money if it remains in business.wi

What is​ technology? Technology is

the processes a firm uses to turn inputs into outputs of goods and services.th

Suppose that Bill owns an automobile collision repair shop and the table below shows the quantity of cars repaired per month according to how many workers Bill hires. Assume he pays each worker ​$5,000 per month and his fixed cost equals ​$5,000 per month. Using the information​ provided, complete the table given below.​ (Enter your responses rounded to two decimal​ places.)

use the attached table to calculate in a spread sheet.

Sally looks at her college transcript and says to​ you, ​"How is this​ possible? My grade point average​ (GPA) for this​ semester's courses is higher than my GPA for last​ semester's courses, but my cumulative GPA still went down from last semester to this​ semester." Explain to Sally how this is possible.

​​Sally's GPA for this semester is lower than her cumulative GPA.