econ

(Figure: The Total Product) Look at the figure The Total Product. Labor added L1and up to L2 is:

subject to diminishing marginal returns

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

(Figure and Table: Variable, Fixed, and Total Costs) Look at the figure and table Variable, Fixed, and Total Costs. In the figure, when 96 bushels of wheat is produced, the average fixed cost is ________, average variable cost is ________, and average total cost is ________.

$4.17; $16.67; $20.83

(Table: Production Function for Soybeans) The table shows a 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 total cost of producing 70 bushels of soybeans is:

$550

(Table: Costs for Birthday Cakes) Annie has a bakery that specializes in birthday cakes, and her variable costs of producing cakes are shown in the table Costs of Birthday Cakes. Assume that her fixed costs are $10. The point of diminishing returns occurs at what output?

3

(Figure: The Total Product) Look at the figure The Total Product. After hiringL2 labor and producing at point B on the total product curve, hiring more labor beyond L2 would result in which of the following statements being true of the total product curve?

The marginal product of labor is negative.

When Caroline's dress factory hires two workers, the total product is 50 dresses. When she hires three workers, total product is 48, and when she hires four workers, total product is 46. The marginal product of the third and fourth workers is

decreasing and negative.

When Caroline's dress factory hires two workers, the total product is 50 dresses. When she hires three workers, total product is 60, and when she hires four workers, total product is 65. The slope of the marginal product curve when two to four workers are hired is

downward sloping.

(Table: Output and Marginal Cost) Look at the table Output and Marginal Cost. After graduation you achieve your dream of opening your own art shop that specializes in selling mud statues. After careful study, you determine the information in the table. How many workers should you hire to minimize your average variable costs?

four

(Table: Costs of Producing Bagels) Look at the table Cost of Producing Bagels. Average total cost reaches its minimum value for the ________ bagel.

fourth

(Table: Linda's Copy Shop Production) Look at the table Linda's Copy Shop Production. Linda's production runs into diminishing returns to her variable inputs when she employs the ________ unit.

fourth

When a fine caterer produces 30 catered meals, its marginal cost and average variable cost each equal $10. Therefore, assuming normally shaped cost curves, at 29 meals:

its marginal cost is less than $10 and its average variable cost is more than $10.

(Figure: The Total Product) Look at the figure The Total Product. When L2labor is hired, the total product is at a ________and the marginal product of labor is________.

maximum; zero

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

negative

The slope of a long-run average total cost curve exhibiting diseconomies of scale is:

positive

(Figure: The Total Product) Look at the figure The Total Product. Labor addedL1 and up to L2 is:

subject to diminishing marginal returns.

In the short run, as output gets larger and larger:

the average variable cost curve gets closer and closer to the average total cost curve.