Econ Final Ch. 8

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Refer to the table to the right which shows cost data for Lotus Lanterns, a producer of whismsial night lights. What is the total variavle cost of production when the firm produces 115 lanterns?

$1,157

Refer to the table to the right which shows cost data for Lotus Lanterns, a producer of whimsical night lights. What is the average total cost of production when the firm produces 120 lanterns?

$14

If the marginal cost curve is below the average variable cost curve, then

average variable cost is decreasing

The average total cost of production

equals total cost of production divided by the level of output.

Average fixed costs of production

falls as long as output is increased

A firm has successfully adopted a positive technological change when

it can produce more output using the same inputs.

Which of the following is not a source of technological advancement for a producer?

outsourcing some aspect of production

When a firm produces 50,000 units of output, its total cost equals $6.5 million. When it increases its production to 70,000 units of output, its total cost increased to $9.4 million. Within this range, the marginal cost of an aditional unit of output is

$145

The figure to the right shows the cost structure for a firm. When output level is 100, what is the total cost of production?

$2,000

Refer to the table to the right which shows cost data for Lotus Lanterns, a producer of whimsical night lights. What is the marginal cost per unit of production when the firm produces 100 lanerns

$32

Vipsana's Gyros House sells gyros. The cost of ingredients (pita, meat, spices, etc.) to make a gyro is $2.00. Vipsana pays her employees $60 per day. She also incurs a fixed cost of $120 per day. Calculate Vipsana's total cost per day where she produces 50 gyros using two workers?

$340

Golda Rush quit her job as a manager for Home Depot to start her own hair dressing salon, Goldilocks.

$41,500

Golda Rush quit her Job as manager from home depot to start her own hair dressing salon, Goldilocks.

$45,500

The figure to the right shows the cost structure for a firm. When the output level is 100 units average fixed cost is

$8

Refer to the table to the right which shows the technology of production at the Matsuko's Mushroom Farm for the month of May. What is the average product of labor when the farm hires 5 workers?

10.8 bushels

Refer to the diagram to the right. The marginal product of the 3rd worker is

15

Refer to the diagram to the right. The average product of the 4th worker

17

Refer to the table to the right which shows the technology of production at the Matsuko's Mushroom Farm for the month of May. Diminishing marginal returns sets in when the ______ worker is hired.

3rd

Refer to the table to the right which shows the technology of production at the Matsuko's Mushroom Farm for the month of May. What is the marginal production of the 4th worker?

5 pounds

If 11 workers can produce a total of 54 units of a product and a 12th worker has a marginal product of 6 units, then the average product of 12 workers is

5 units

Which of the following is correct?

AFT+AVC= ATC

Which of the following is a reason why a firm would experience diseconomies of scale

As the size of the firm increases it becomes more difficult to coordinate the operations of its manufacturing plants.

Refer to the diagram to the right. Identify the curves in the diagram.

E=marginal cost curve; F=total cost curve; G= average variable cost curve; H= average fixed cost curve

Which of the following explains why the marginal cost curve has a U shape?

Initially, the marginal product of labor rises, then falls.

Which of the following statements best describes the economic short run?

It is a period during which at least one of the firm's inputs is fixed.

Refer to the diagram to the right. Identify the minimum efficient scale of production.

Qb

Marginal cost is the

additional cost of producing an additional unit of output.

Refer to the diagram to the right. Diminishing returns to labor set in

after L1

Refer to the diagram to the right. The verticle difference between curves F and G measures

average fixed cost

If production displays economies of scale, the long run average cost curve is

downward-sloping

Economics cost of production differ from accounting costs in that

economic cost adds the opportunity cost of a firm using its own resources while accounting cost does not.

If, when a firm doubles all its inputs, its average cost of production decreases, then production displays

economics of scale

Which of the following is an implicit cost of production?

rent that could have been earned on a building owned and used by the firm

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.

Refer to the diagram to the right. Diminishing marginal productivity sets in after

the 2nd worker is hired.

The marginal product of labor is defined as

the additional output that results when one more worker is hired, holding all other resources constant.

Refer to the diagram to the right. The curve labeled "E" is

the marginal product curve

Refer to the diagram to the right. The average product of labor declines after L2 because

the marginal product of labor is below the average product of labor

The production function shows

the maximum output that can be produced from each possible quantity of inputs

The basic activity of a firm is

to use inputs to produce outputs of goods and services.


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