production econ 2200

If a firm's total revenue just covers its implicit and explicit costs of production, then

economic profit is zero.

The total fixed cost of production is

$10

If you know that total fixed cost is $200, total variable cost is $600, and total product is 4 units, then average total cost must be

$200

Suppose that a firm produces 200,000 units a year and sells them all for $10 each. The explicit costs of production are $1,500,000 and the implicit costs of production are $300,000. The firm earns an accounting profit of __________ and an economic profit of __________. rev: 06_26_2018

$500,000; $200,000

With the addition of the second unit of input, the marginal product is __________ and the average product is __________.

15, 10

The total cost associated with the production of 5 units of output is

2500

What is the long-run average total cost of producing 30 units of output?

7

The marginal cost associated with the production of the sixth unit of output is

8

With total fixed cost of $400, a firm incurs an average total cost of $3 and average variable cost of $2.50. The amount of output produced by the firm must be

800

Assume that you are the owner of a small bakery in your home town. Which of the following would be a variable cost of production in the short run?

Baking supplies (flour, salt, etc.)

Which of the following constitutes an implicit cost to the Asarta Manufacturing Company?

Foregone interest income from using savings to pay for operating expenses

Which factor could contribute to a firm experiencing economies of scale?

Productivity gains from more specialized labor

The reason the marginal cost curve eventually increases as output increases for the typical firm is because of

diminishing marginal returns.

If the total cost of production increases by 10% and output increases by less than 5%, then the firm is experiencing

diseconomies of scale.

The main difference between the short run and the long run is that

in the short run, some inputs are fixed and some are variable.

Fixed costs are those costs that are

independent of the amount of output a firm produces in the short run.

Round Things, Inc.'s production process exhibits economies of scale. Currently its long-run average total cost is $1/unit. If Round Things doubles its use of all inputs, its new long-run average total cost will be

less than $1/unit.

The law of diminishing marginal returns in a manufacturing plant of a fixed capacity implies that, eventually, employing

one more worker will decrease the average product per worker.

Implicit costs are

opportunity costs of using owned resources.

If the firm is producing at Q1, the area BADE represents the

total fixed cost