chapter 7

which of the following is an example of a fixed input?

a leased store front for a sandwich shop

an entrepreneur decided to leave a job that pays $50,000 a year to start a business. these lost wages would be considered _.

an implicit cost

look at the figure long-run and short-run average cost curves. if a firm is producing at point c on the atc2 but anticipated increasing output to 225,000 units in the long run, the firm will build a _ plant and have _ of scale.

bigger; diseconomies

a _ cost is the cost of inputs that increase or decrease with production.

variable

(figure short-run costs) look at the figure short-run costs. c is the _ cost curve.

average variable

a firm was producing 20,000 units of output at the total cost of $40,000. it now produces 30,000 units and the corresponding total cost is $50,000. this firm is experiencing _.

economies of scale

When __________________ exist, doubling of all inputs will result in more than doubling output, which means __________________________________________.

economies of scale; a larger factory can produce at a lower average cost than a smaller company.

if veronica is producing where she is facing diminishing marginal returns, then the marginal costs will be:

increasing

variable inputs refer to _ that can easily be increased or decreased in a _ period.

inputs; short

________________________ arises where many firms are competing in a market to sell similar but differentiated products.

monopolistic competition

at the current level of output, becca furniture's marginal cost curve is above the average total cost curve. this means becca furniture's average total cost curve:

must be rising

wood falls into which category of factors of production?

natural resources

_ is the total revenue minus total costs.

profit

ryan is a student at a community college. which of the following is NOT an explicit cost of ryan attending community college?

the salary that she could have earned working full-time

refer to the diagram above. based on the information illustrated in the graph, which of the following is correct?

the transition point between where MC is pulling down and pulling up AC always occurs at the minimum point of the AC curve

choosing the best process or method to produce a good falls under which category of the factors of production?

technology

The graph above illustrates the total cost function for GoodieCookie Co. How are the company's fixed costs represented in this graph?

as the point where the total cost curve touches the vertical axis

____________________________ occur when the marginal gain in output diminishes as each additional unit of input is added.

diminishing marginal returns

the law of diminishing marginal product days that in the short-run, the marginal product _ at firsts but sooner or later additional workers will have a _ marginal product.

increases; decreasing effect on

The table below sets out cost information for the production of volley balls. Some values are missing. Which of the following statements is correct?

A = 42, F =13

_____________________ help to explain why every economy, as it develops, has an increasing proportion of its population living in urban areas.

Agglomeration factors

_, also known as profit margin, is the profit divided by quantity produced, or average revenue minus average cost.

average profit

the marginal cost curve crosses the _ at its lowest point.

average total cost curve

suppose that ATC curve represents you grade point average in college. let MC curve represent your marginal grade. which of the following is true?

if your gpa = 3.00, and the grade in your next course is b+ (3.33), your gpa will increase.

which of the following should typically be ignored because spending has already been made and cannot be changed?

sunk costs

the sum of the fixed plus variable costs is known as _.

total cost

where diseconomies of scale are present, the long run average cost curve will be

upward sloping

the marginal cost curve is generally _, because diminishing marginal returns implies that additional units are _.

upward sloping; more costly to produce