HW 7

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 variable cost per day when she produces 50 gyros using two workers?

220

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

If a firm is experiencing diseconomies of scale, its long run average cost curve is increasing

Ture

Marginal cost is equal to

change in total cost divided by change in output

When a firm's long-run average cost curve is horizontal for a range of output, then that range of production displays

constant returns to scale

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

economies of scale

Average fixed costs of production

fall as long as output is increased

In economics, technology can only refer to the development of new products.

false

The processes a firm uses to turn inputs into outputs of goods and services is called

technology

In the long run which of the following is true?

there are no fixed costs

If another worker adds 9 units of output to a group of workers who had an average product of 7 units, the average product of labor is

will increase

16 When output level is 100, what is total cost of production?

$2,000

15 the marginal product of the 3rd worker is

15

if the total cost of producing 20 units of output is 1,000 and the average variable cost is $35, what is the firm's fixed average cost at that level of output

15

if the 4 workers can produce 18 chairs a day and 5 can produce 20 chairs a day, the marginal product of the fifth worker is

2 chairs

Which of the following is a fixed cost

a payment to hire a security worker to guard the gate to the factory around the clock

12 Diminishing returns to labor set

after L1

a characteristic of the long run

all inputs can be varied

the law of diminishing marginal return states

at some point, adding more of a variable input to a given amount of fixed imput will cause the marginal product of the variable output to decline

A firm has successfully adopted a positive technological change when

it can produce more output using the same inputs