Microeconomics chp 13 pt 2

Refer to scenario 13-5 in produced the 7,000 staplers the firms average fixed cost was

2.43

refer to scen 13-5 in producing the 7,000 staplers the firms average variable cost ws

4

because of the greater flexibility that firms have in the long run , all short run cost curve lie on or above the long run curve

T

diminishing marginal product exists when the production function becomes flatter as input increase

T

in some cases, specialization allows larger factories to produce goods at a lower average cost than smaller factories

T

the shape of the marginal cost curve tells a producer something about the marginal product of her workers

T

some costs do not vary with quantity output produced, those costs are called

fixed costs

total cost can be divided into two types of costs those two types are

fixed costs and variable csotss

Constant returns to scale occur when

long-run average total costs are constant as output increases.

at what level of output will average variable cost equal average total cost

there is no level of output where this occurs, as long as fixed costs are positive

the shape of the total cost curve is unrelated to the shape of the production function

F

When economists speak of a. firms cost they are usually excluding the opportunity costs

F

diminishing marginal product exists when the total cost curve becomes flatter as output increases

F

if the marginal cost curve tells a produced something about the marginal product of her workers

F

For Firm A, when four units of output are produced, the total cost is $175 and the average variable cost is $33.75. What would the average fixed cost be if ten units were produced?

a. $4

The length of the short run

a. is different for different types of firms.

When marginal cost exceeds average total cost

average total cost must be rising

The minimum points of the average variable cost and average total cost curves occur where

b. the marginal cost curve intersects those curves.

If a firm experiences constant returns to scale at all output levels, then its long-run average total cost curve would

be horizontal.

Which of the following costs of publishing a book is a fixed cost?

d. Composition, typesetting, and jacket design for the book.

In the long run for Firm A, total cost is $105 when output is 3 units and $120 when output is 4 units. Does Firm A exhibit economies or diseconomies of scale?

d. Economies of scale, since average total cost is falling as output rises.

Economies of scale arise when

d. workers are able to specialize in a particular task.