ECON Quiz 5: Chapter 7
(Figure 21.2) What is the marginal cost of the 120th unit of output?
$288.00
(Table 21.5) The total cost of 3 units of output is
$30.
(Figure 21.1) The marginal physical product of the third unit of labor is
12.0 units per day.
(Figure 21.4) A firm that produces between 600 and 800 units per period should choose a plant with a short-run average total cost function of
ATC2 only.
Megan used to work at the local pizzeria for $15,000 per year but quit in order to start her own deli. To buy the necessary equipment, she withdrew $20,000 from her inheritance (which paid 8 percent interest). Last year she paid $25,000 for ingredients and $500 per month rent but had revenue of $50,000. She asked her dad the accountant and her mom the economist to calculate her costs for her.
Dad says her cost is $31,000, and Mom says her cost is $47,600.
When the average total cost curve is rising, the marginal cost curve will be
above the average total cost curve.
Sam's surf shop has total costs of $2,000 when it is not producing any surfboards. This means that
fixed costs are $2,000.
Greater labor productivity means
higher output per worker.
The period in which there are no fixed costs is the
long run.
In the short run, when a firm produces zero output, the variable cost equals
zero.