Chapter 11 Worksheets - Micro

Lisa quit her $40,000-per-year job to start her own economics consulting firm. At the end of her first year of operation, her total revenues were $150,000. Her total explicit costs were $108,000. Her economic profit for the year was:

$2,000.00

given the table below, what are the fixed costs for 3 units of output? Table on question 5 of worksheet

$4.00

Given the table below, what are the marginal costs of producing the fifth unit of output? Table on question 6 of worksheet

$6

Economic costs of production differ from accounting costs in that

economic costs add the opportunity costs of a firm using its own resources while accounting costs do not

which of the following statements has to be true?

if MC is greater than ATC, ATC is rising

The law of diminishing marginal productivity occurs

in the short run

Economists define the long run as

A period of time in which all inputs are variable

The law of diminishing marginal productivity occurs because

additional workers cannot be as effective as previously hired workers because other inputs are fixed

a characteristic of the long run is

all inputs can be varied

When MC = ATC, we know that

average total cost is minimized

improvements in inventory control represent a positive technological change because they allow firms to produce the same output with fewer inputs. In recent years, many firms have adopted an inventory system in which firms accept shipments from suppliers as close as possible to the time they will be needed. Walmart has been a pioneer in using inventory control systems to this in its stores. This type of inventory system is called a ______ inventory system

just-in-time

The law of diminishing marginal productivity explains why the

marginal cost curve eventually becomes upward sloping

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

marginal product of labor

the additional output a firm produces as a result of hiring one more worker

the marginal product of labor is defined as

the change in output that a firm produces as a result of hiring one more worker

average product of labor

the total output produced by a firm divided by the quantity of workers