ECON Chapter 11
What is the short run?
A period of time during which at least one of the firm's input is fixed
Which costs are affected by the level of output produced?
Variable costs
What is the additional output that a firm produces as a result of hiring one more worker called?
Marginal product of labor
Refer to the graph below. From the origin up until point A,
output increases at a increasing rate
Refer to the graph below. How much is the value of total fixed cost?
$2400
Refer to the table below. What is the marginal cost of producing the 200th pizza?
$3.25
Refer to the table below. What is the marginal cost of producing the 640th pizza
$43.33
What does the term "spreading the overhead" refer to?
NOT reducing total cost by selling more output
Which of the following is known as the highest-valued alternative that must be given up in order to engage in an activity?
Opportunity Cost
Refer to the table below. What is the average total cost of producing 550 pizzas?
$5.00
Refer to the graph below. Based on the relationship between average total cost and marginal cost, which of the curves below appears to be average total cost?
Curve 2
Refer to the graph below. Based on the relationship between marginal product and average product, which curve appears to be average product?
Curve 2
Refer to the graph below. At any level of output, what is the vertical distance between Curve 2 and Curve 3 equal to
Curve 4
Refer to the graph below. In moving along the curve from point A to point B, which of the following is more likely to occur?
Diminishing returns
Which of the following are sometimes called accounting costs?
Explicit cost
Which of the following is true? i.Total cost = fixed cost + variable cost ii.Total cost = explicit costs + implicit costs iii.Economic cost = accounting cost + implicit costs
I, II, and III
Which of the following statements is correct?
In the long run, all costs are variable
Refer to the graph below. For a certain output range (or quantity of pizzas produced per day), marginal cost is greater than average cost. What is this output range?
Output range greater than about 525 pizzas per day
The term used to describe a change in the ability of a firm to produce a given level of output with a given level of inputs is called___.
Technological change
The processes a firm uses to turn inputs into outputs of goods and services is.
Technology
Fill in the blanks. When graphing a conventional short-run production function, we place____ on the horizontal axis and ____on the vertical axis.
The variable input; output
If the number of people in a publishing company does not go up or down with the quantity of books it publishes, then how should we categorize the salaries and benefits paid to these employees?
They are part of fixed cost
Refer to the graph below. What does Curve 4 represent?
Average fixed cost
The following cost measures reach their minimum points when they are equal to the value of marginal cost, except one. Which cost measure is the exception?
Average fixed cost
What do we obtain by dividing the fixed cost by the quantity of output produced?
Average fixed cost
Which of the following refers to the total output produced by a firm divided by the quantity of workers?
Average product of labor
What cost measure is equal to AFC + AVC?
Average total cost
Refer to the graphs below. Which graph is representative of a typical average total cost curve?
NOT A OR D
Refer to the table below. Which of the following costs are implicit costs?
NOT all of the above or lease payments
What happens to the difference between average variable cost and average total cost as the level of output increases?
The difference decreases
What is the production function?
The relationship between the inputs employed by a firm and the maximum output it can produce with those inputs
Refer to the table below. When do diminishing returns in the production of pizzas start?
When the third worker is hired
Which of the following statements about the relationship between marginal product of labor and average product of labor is correct?
Whenever the marginal product of labor is greater than the average product of labor, the average product of labor must be increasing.