ECON 221- Chapter 11

(Table: Cost Data) Look at the table Cost Data. The average fixed cost of producing 5 purses is:

$10

(Figure: The Average Total Cost Curve) Look at the figure The Average Total Cost Curve. The total cost of producing 10 pairs of boots is approximately:

$1,308

(Table: Production Function for Soybeans) Look at the table Production Function for Soybeans. Assume that the fixed input, capital, is 10 acres of land and a tractor, which have a combined cost of $150 per day. The cost of labor is $100 per worker per day. The variable cost of producing 25 bushels of soybeans is:

$100

(Table: Cakes) Look at the table Cakes. Pat is opening a bakery to make and sell special birthday cakes. She is trying to decide how many mixers to purchase. Her estimated fixed and average variable costs if she purchases one, two, or three mixers are shown in the table. Assume that average variable costs do not vary with the quantity of output. If Pat purchases two mixers and bakes 100 cakes per day, what is her average fixed cost?

$15

(Table: Production Function for Soybeans) Look at the table Production Function for Soybeans. Assume that the fixed input, capital, is 10 acres of land and a tractor, which have a combined cost of $150 per day. The cost of labor is $100 per worker per day. The fixed cost of producing 25 bushels of soybeans is:

$150

(Table: Total Cost Data) Look at the table Total Cost Data. What is the total variable cost for this bicycle firm when the firm produces 5 bicycles?

$190

(Table: Costs of Birthday Cakes) Look at the table Costs of Birthday Cakes. Assume that fixed costs are $10. What is the average fixed cost of 4 cakes?

$2.50

(Table: Workers and Output) Look at the table Workers and Output. After graduation you achieve your dream of opening an art shop that specializes in selling mud statues. You pay $10 per day on a loan from your uncle, and regardless of how much you produce, you pay $10 per day to each of the workers who make the mud statues. The variable cost of producing 25 statues is:

$20

(Figure: The Average Total Cost Curve) Look at the figure The Average Total Cost Curve. The total cost of producing three pairs of boots is approximately:

$216

(Table: Cost Data) Look at the table Cost Data. The average fixed cost of producing 2 purses is:

$25

(Table: Lindsay's Farm) Look at the table Lindsay's Farm. When Lindsay produces 140 units of produce, her total cost is:

$350

Kaile Cakes produces 10 cakes per day. The marginal cost of the tenth cake is $24, and average total cost of 10 cakes is $6. The average total cost of 9 cakes is:

$4

(Table: Cost Data) Look at the table Cost Data. The average total cost of producing 6 purses is:

$50

(Table: Workers and Output) Look at the table Workers and Output. After graduation you achieve your dream of opening an art shop that specializes in selling mud statues. You pay $10 per day on a loan from your uncle, and regardless of how much you produce, you pay $10 per day to each of the workers who make the mud statues. The total cost of producing 48 statues is:

$60

(Figure and Table: Variable, Fixed, and Total Costs) Look at the figure and table Variable, Fixed, and Total Costs. When 51 bushels of wheat is produced, the average fixed cost is _____, average variable cost is _____, and average total cost is _____.

$7.84; $11.76; $19.60

(Figure: Short-Run Costs II) Look at the figure Short-Run Costs II. Curve 1 crosses the average variable cost curve at:

3 units of output

(Table: Labor and Output) Look at the table Labor and Output. The marginal product of the fifth worker is:

4

(Figure: Marginal Product of Labor) Look at the figure The Marginal Product of Labor. The total product of labor for five workers is _____ bushels

75

(Figure: Marginal Product of Labor) Look at the figure The Marginal Product of Labor. The total product of labor for five workers is _____ bushels.

75

(Figure: Long-Run and Short-Run Average Cost Curves) Look at the figure Long-Run and Short-Run Average Cost Curves. If a firm faced the long-run average total cost curve shown in the figure and it expected to produce 100,000 units of the good in the long run, the firm should build the plant associated with:

ATC2

When long-run average total cost is constant as output increases, the firm has constant returns to scale.

True

Cindy operates Birds-R-Us, a small store manufacturing and selling 100 bird feeders per month. Cindy's monthly total fixed costs are $500, and her monthly total variable costs are $2,500. If for some reason Cindy's fixed cost fell to $400, then her _____ costs would _____.

average total; decrease

The average total cost of producing cell phones in a factory is $20 at the current output level of 100 units per week. If fixed cost is $1,200 per week:

average variable cost is $8

When a firm has diminishing marginal returns:

marginal product is falling but is likely to be still positive

(Figure: Long-Run and Short-Run Average Cost Curves) Look at the figure Long-Run and Short-Run Average Cost Curves. If a firm is producing at point C on the ATC2 but anticipates increasing output to 225,000 units in the long run, the firm will build a _____ plant and have _____ of scale.

bigger; diseconomies

The idea of diminishing returns to an input in production suggests that if a local college adds more custodians, the marginal product of labor for the custodial staff will:

decrease

(Table: Cakes) Look at the table Cakes. Pat is opening a bakery to make and sell special birthday cakes. She is trying to decide how many mixers to purchase. Her estimated fixed and average variable costs if she purchases one, two, or three mixers are shown in the table. Assume that average variable costs do not vary with the quantity of output. If Pat purchases three mixers, her average fixed cost _____ in the range of output between 100 and 400 cakes.

decreases

A firm's long-run average total costs increase as it produces more output. This firm has:

diseconomies of scale

(Figure: Long-Run Average Cost) Look at the figure Long-Run Average Cost. This firm has _____ in the output region from 0 to A.

economies of scale

For most restaurants, the average total cost curve _____ at _____ levels of output, then _____ at _____ levels

falls; low; rises; high

A cost that does not depend on the quantity of output produced is:

fixed

An input whose quantity CANNOT be changed in the short run is:

fixed

(Table: Output and Marginal Cost) Look at the table Output and Marginal Cost. After graduation you achieve your dream of opening an art shop that specializes in selling mud statues. How many statues should you produce to minimize your average variable costs?

four

When diseconomies of scale occur:

long-run average cost rises

At the long-run quantity of output, where the long-run average total cost curve is at its lowest point, it is tangent to the _____ of the corresponding short-run average total cost curve.

minimum

When a firm adds capital, in the short run workers will be:

more productive, since they have more equipment

The slope of a long-run average total cost curve exhibiting decreasing returns to scale is:

positive

You own a deli. Which of the following is most likely a fixed input at your deli?

the dining room

In the long run:

the firm has time to change the level of all inputs

In economics, the short run is defined as:

the period in which some inputs are considered to be fixed in quantity

The marginal product of labor is:

the slope of the total product of labor curve

The production function provides information about:

the transformation of inputs into output

For Heidi, the marginal cost of producing one additional photograph equals the change in _____ divided by the change in the _____ of photographs.

total cost; number

Tankao makes Bluetooth sets for mobile devices. When 50 Bluetooth sets are produced in the short run, the average variable cost is $30. Tankao's average _____ cost is _____.

total; greater than $30

(Table: Bonnie's Production Function for Good Z) Look at the table Bonnie's Production Function for Good Z. The costs that vary with Bonnie's level of production are her:

variable costs

You run a business producing picture frames. This month your total cost of production is $10,000, your variable cost of production is $6,000, and you produce 3,000 picture frames. It follows that average _____ cost is _____.

variable; $2

Diminishing returns to an input occur:

when some inputs are fixed and some are variable

If two firms are identical in all respects except that one has more of the fixed input capital than another, the total product curve for the firm with more capital:

will lie above the total product curve for the firm with less capital

Marginal cost can be calculated as:

ΔTC / ΔQ, where TC is total cost and Q is output; ΔVC / ΔQ, where VC is variable cost and Q is output; and as the slope of the total cost curve