Micro 6

Answer the next question(s) on the basis of the accompanying table that shows average total costs (ATC) for a manufacturing firm whose total fixed costs are $10: Refer to the above data. The total cost of producing 4 units of output is:

$124.

Refer to the above data. The average total cost of producing 3 units of output is:

$16

Answer the next question(s) on the basis of the accompanying table that shows average total costs (ATC) for a manufacturing firm whose total fixed costs are $10: Refer to the above data. The average variable cost of 4 units of output is:

$28.50.

Answer the next question(s) based on the accompanying table that shows the average total costs (ATC) for a manufacturing firm whose total fixed costs are $10: Refer to the above data. The marginal cost of the fourth unit of output is:

$37

Refer to the above data. The total variable cost of producing 5 units is:

$37

Refer to the above data. The average fixed cost of producing 3 units of output is:

$8

Refer to the above data. The marginal cost of producing the sixth unit of output is:

$8

Refer to the above data. The marginal product of the sixth worker is:

15 units of output.

Which of the following is a short-run adjustment?

A local bakery hires two additional bakers.

What do wages paid to blue-collar workers, interest paid on a bank loan, forgone interest, and the purchase of component parts have in common?

All are opportunity costs.

The total output of a firm will be at a maximum where:

MP is zero.

The law of diminishing returns indicates that:

The law of diminishing returns indicates that:

Which of the following is correct?

When AP is rising, AVC is falling

Diseconomies of scale means that:

a firm's long-run average total cost curve is rising

An explicit cost is:

a money payment made for resources not owned by the firm itself

Fixed cost is:

any cost which does not change when the firm changes its output.

In the short run the Sure-Screen T-Shirt Company is producing 500 units of output. Its average variable costs are $2.00 and its average fixed costs are $.50. The firm's total costs:

are $1,250.

The short run is characterized by:

at least one fixed resource.

The basic difference between the short run and the long run is that:

at least one resource is fixed in the short run, while all resources are variable in the long run.

For most producing firms:

average total costs decline as output is carried to a certain level, and then begin to rise

Refer to the above data. The profit-maximizing output for this firm:

cannot be determined from the information given

Marginal cost is the:

change in total cost that results from producing one more unit of output.

Average fixed cost:

declines continually as output increases

If a firm doubles its output in the long run and its unit costs of production decline, we can conclude that:

economies of scale are being realized

Marginal cost:

equals both average variable cost and average total cost at their respective minimums.

Economic profits are calculated by subtracting:

explicit and implicit costs from total revenue.

To the economist, total cost includes:

explicit and implicit costs, including a normal profit.

Accounting profits are typically:

greater than economic profits because the former do not take implicit costs into account

To economists, the main difference between the short run and the long run is that:

in the long run all resources are variable, while in the short run at least one resource is fixed.

Refer to the above data. The marginal product of the fourth worker:

is 5.

If a firm decides to produce no output in the short run, its costs will be:

its fixed costs

If average total cost is declining, then:

marginal cost must be less than average total cost

The first, second, and third workers employed by a firm add 24, 18, and 9 units to total product respectively. Therefore, the:

marginal product of the third worker is 9.

Marginal product:

may initially increase, then diminish, and ultimately become negative

Costs to an economist:

may or may not involve monetary outlays.

Implicit costs are:

non-expenditure costs.

Diseconomies of scale:

pertain to the long run

If the total variable cost of 9 units of output is $90 and the total variable cost of 10 units of output is $120, then:

the average variable cost of 9 units is $10

In comparing the changes in TVC and TC associated with an additional unit of output, we find that:

the changes in TC and TVC are equal

Economies of scale are indicated by:

the declining segment of the long-run average total cost curve.

Implicit and explicit costs are different in that:

the former refer to non-expenditure costs and the latter to out-of-pocket costs

Marginal product is:

the increase in total output attributable to the employment of one more worker

When diseconomies of scale occur:

the long-run average total cost curve rises.

Normal profit is:

the return to the entrepreneur when economic profits are zero

Refer to the above data. Diminishing marginal returns become evident with the addition of the:

third worker

Refer to the above data. When two workers are employed:

total product is 18

The amount of calendar time associated with the long run:

varies from industry to industry