ECON1101 Test 2
(Table: Costs of Producing Bagels) The marginal cost of producing the second bagel is:
$0.10
(Table: Costs of Producing Bagels) The average total cost of producing six bagels is:
$0.15
(Table: Costs of Producing Bagels) The average total cost of producing two bagels is:
$0.20
(Table: Costs of Producing Bagels) The marginal cost of producing the sixth bagel is:
$0.20
(Table: Costs of Producing Bagels) The total cost of producing two bagels is:
$0.40
(Table: Costs of Producing Bagels) The total cost of producing six bagels is:
$0.90
(Figure: Average Total Cost Curve) In the figure, the total cost of producing 10 pairs of boots is approximately:
$1,308
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 decreasing returns to scale is:
positive
In the short run:
some inputs are fixed and some inputs are variable
(Figure: Short-Run Costs II) Curve 1 crosses the average total cost curve at:
the minimum value of Curve 2
(Figure: Short-Run Costs) At seven units of output, average fixed cost is approximately ________, and average variable cost is approximately ________.
$40; $100
(Table: Total Product and Marginal Product) The marginal product of the second worker is:
20
(Figure: Short-Run Costs II) Curve 1 crosses the average variable cost curve at:
3 units of output
(Figure: Short-Run Costs) The vertical difference between curve B and curve C at any quantity of output is:
average fixed cost
(Figure: Short-Run Costs II) Curve 2 is the ________ cost curve.
average total
(Figure: Short-Run Costs) B is the ________ cost curve.
average total
If marginal cost is equal to average total cost, then:
average total cost is at its minimum
(Figure: Short-Run Costs II) Curve 3 is the ________ cost curve.
average variable
Ashley Bakery expects its marginal cost curve will eventually slope upward, because in baking there is (are):
diminishing marginal returns
Diminishing marginal returns means that:
each additional unit of an input used will increase output, but by smaller and smaller amounts
(Table: Total Product and Marginal Product) Negative marginal returns begin when the ________ worker is added.
eighth
Marginal cost ________ over the range of increasing marginal returns and ________ over the range of diminishing marginal returns.
falls; increases
(Table: Costs of Producing Bagels) Average total cost reaches its minimum value for the ________ bagel.
fourth
If a firm experiences lower costs per unit as it increases production in the long run, this is an example of:
increasing returns to scale
The marginal cost curve intersects the average variable cost curve at:
its lowest point
Decreasing and increasing returns to scale account for the shape of the:
long-run average total cost curve
(Figure: Short-Run Costs II) Curve 1 is the ________ cost curve.
marginal
(Figure: Short-Run Costs) A is the ________ cost curve.
marginal
The curve that shows the additional cost of each additional unit of output is called the:
marginal cost curve