Chap 5 Concepts: ECON 640

Which curve(s) does the marginal cost curve intersect at the (their) minimum point?

Average total cost curve and average variable cost curve

According to the table below, at what level of output is marginal cost minimized?

90

The demand for labor by a profit-maximizing firm is determined by:

VMPL = W.

The marginal cost curve:

intersects the ATC and AVC at their minimum points.

The marginal product of an input is defined as the change in:

total output attributable to the last unit of an input.

According to the table below, what is the average variable cost of producing 50 units of output?

14

The production function Q = L.5K.5 is called:

Cobb Douglas.

Firm managers should use inputs at levels where the:

Marginal benefit equals marginal cost and value marginal product of labor equals wage.

Total product begins to fall when:

Marginal product is zero.

The recipe that defines the maximum amount of output that can be produced with K units of capital and L units of labor is the:

Production function.

It is profitable to hire labor so long as the:

VMPL is greater than wage.

The long-run average cost curve defines the minimum average cost of producing alternative levels of output, allowing for optimal selection of:

all factors of production.

Economies of scale exist whenever long-run average costs:

decrease as output is increased.

Suppose the long-run average cost curve is U-shaped. When LRAC is in the increasing stage, there exist:

diseconomies of scale.

It is profitable to hire units of labor as long as the value of marginal product:

exceeds wage.

The short run is defined as the time frame:

in which there are fixed factors of production.

As the usage of an input increases, marginal product:

initially increases then begins to decline.

The minimum average cost of producing alternate levels of output, allowing for optimal selection of all variables of production is defined by the:

long-run average total cost curve.

The change in total output attributable to the last unit of an input is the:

marginal product.

Variable factors of production are the inputs that a manager:

may adjust in order to alter production.

If the last unit of input increases total product, we know that the marginal product is:

positive.

A production function:

represents the technology available for turning inputs into output.

The long run is defined as:

the horizon in which the manager can adjust all factors of production.