ch. 8 quiz e

A pool-cleaning firm employs cleaning machines and cleaning workers. If local wages fall and robots become more effective, the firm should employ:

one cannot tell

Consider a firm, using capital (K) and labor (L) in the production process, that wants to expand production. Suppose MPK = 500. The cost of capital is r = 50, and the wage rate is w = 20. The firm would use more labor to expand production only if the marginal product of labor is greater than

200

nsider a firm, using capital (K) and labor (L) in the production process, that wants to expand production. Suppose MPK = 500. The cost of capital is r = 50, and the wage rate is w = 20. The firm would use more labor to expand production only if the marginal product of labor is greater than _____.

200

Consider a firm, using capital (K) and labor (L) in the production process, that wants to expand production. Suppose MPK = 3,600. The cost of capital is r = 300, and the wage rate is w = 20. The firm would use more labor to expand production only if the marginal product of labor is greater than

240

margianl product of third oven

3000

Consider a firm, using capital (K) and labor (L) in the production process, that wants to expand production. Suppose MPK = 400. The cost of capital is r = 80, and the wage rate is w = 10. The firm would use more labor to expand production only if the marginal product of labor is greater tha

50

If the cost of an oven is $500, what is the marginal product per dollar spent on capital for the third oven

6.0

Consider a firm, using capital (K) and labor (L) in the production process, that wants to expand production. Suppose MPL = 60. The cost of capital is r = 100, and the wage rate is w = 10. The firm would use more capital to expand production only if the marginal product of capital is greater than _____.

600

In the trucking industry, which can we expect as a direct consequence of rising fuel prices?

An increase in long-run average cost.

If a market has small firms and no large firms, what is most likely true about the market?

It has diseconomies of scale beginning at low levels of output.

Given the following data, what should the firm do?Current production = 1,000Current price = $10Marginal cost = $10Total costs = $15,000Fixed cost = $6,000

Continue to produce in the short run, but close down in the long run.

Given the following facts, what should the firm do in the short run? In the long run?Fixed costs are $50,000. Total costs are $90,000. Total revenues are $45,000.

Continue to produce in the short run; leave the industry in the long run.

In the short run, average cost may fall as output increases, due to:

Falling average fixed costs fall and increasing marginal product.

Diminishing returns occurs when:

More and more capital is added to a fixed amount of labor. b More and more labor is added to a fixed amount of capital

diminshing return occurs

More and more capital is added to a fixed amount of labor. b More and more labor is added to a fixed amount of capital.

A Norwegian salmon fish farm employs 5 automatic fish feeding machines and 2 fish feeding specialist workers. The machines can each feed 300 fish per hour at a cost of $20 per hour, and the workers can each feed 150 fish per hour at a cost of $10 per hour. The fish farm should:

Preserve the existing proportion of machines to workers

The shoemaking shops in Milan, Italy, employ an average of 5 workers. Milan's commercial laundry services employ an average of 70 workers. Notice the difference is the size of the business. This is because:

Shoemaking shops experience diseconomies of scale, and laundering services experience economies of scale.

n economy is on its production possibilities frontier. If the economy faces diminishing marginal returns, what will happen to the opportunity cost as the production of one of the categories of goods increases?

The opportunity cost will increase as it takes more to produce the good.

The key difference between the short-run and long-run model of the firm is that:

We assume at least one fixed input in the short run and all variable inputs in the long run.

margianl means

additional

onsider a firm, using capital (K) and labor (L) in the production process, that wants to expand production. Suppose MPK = 600 and MPL = 50. The cost of capital is r = 100, and the wage rate is w = 10. Should this firm employ more labor or more capital?

capital

n the above scenario, after the adjustment to the new optimal amount of machines and workers, the marginal product of a snowblower used by Lambeau Field will:

decrease

In the long run, if a firm is on the downward-sloping portion of its LRAC curve, the firm is currently experiencing

economic of scale

Consider an industry with economies of scale and a decreasing cost industry, both of which are competitive. The economies of scale industry will likely:

have larger firms but cannot tell abt the cost

A private psychiatrist's office is a business that will demonstrate diseconomies of scale, as it will face ______________average costs in the long run.

increasing

Consider a firm that is using capital (K) and labor (L) in the production process and wants to expand production. Suppose MPK = 300 and MPL = 80. The cost of capital is r = 100, and the wage rate is w = 20. Should this firm employ more labor or more capital?

labor

A restaurant employs 10 workers and has one oven. The firm hires an 11th worker. The week after, it hires a 12th worker. We expect the marginal productivity of the 12th worker to be than the 11th worker because of

lowe, diminshing marginal returns

If a production process faces diminishing marginal returns, which of the following is most likely?

marginal cost increase

Toll plazas on a highway charge drivers a toll using an optimal combination of lanes that use toll booth workers and lanes that use automatic machines. Worker-operated lanes can process 100 cars per hour at a cost of $14 per hour, and machine-operated lanes can process 1,200 cars per hour at a cost of $200 per hour. The plaza should employ:

more workers and fewer machines

Which of the following would be likely in a market with firms experiencing economies of scale?

most firms tend to be large

n a market with firms experiencing economies of scale, we will likely see which of the following?

most of the firms tend to be large

In the long run, the concept of economies of scale means that as the firm expands, the firm's total costs are increasing _______ its level of output.

slower than

average cost is defined as

total cost devided by qty produced

In the long run, if a firm is operating with diseconomies of scale, it is on the _______ portion of its LRAC.

upward sloping