Chapter 11 - Quiz 9

all inputs can be varied

A characteristic of the long run is

it can produce more output using the same inputs

A firm has successfully adopted a positive technological change when

a cost that involves spending money

An explicit cost is defined as

economic costs add the opportunity costs of a firm using its own resources while accounting costs do not

Economic costs of production differ from accounting costs in that

changes output by an amount smaller than the output added by the previous unity of labor

Diminishing marginal product of labor occurs when adding another unit of labor

the marginal product of the 5th worker is negative

Gertrude Stork's Chocolate Shoppe normally employs 4 workers. When the Chocolate Shoppe hired a 5th worker the Shoppe's total output decreased. Therefore

5 units

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

marginal product could either be increasing or decreasing

If marginal product is greater than average product, then

each new worker hired adds more to output than previous hires

If production displays increasing marginal returns, then

the division of labor and specialization

Increase in the marginal product of labor result from

True

TRUE/FALSE: The average product of labor is at its maximum when the average product of labor equals the marginal product of labor

equals total cost of production divided by the level of output

The average total cost of production

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

The production function shows

$220

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. Calculated Vipsana's variable cost per day when she produces 50 gyros using two workers?

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

Which of the following is a fixed cost?

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

Which of the following is an implicit cost of production?