Micro Econ Ch. 13 Practice Questions

The graph illustrates a typical

total-cost curve.

What is the value of B?

$100

What is the value of C?

$100

Each worker at the Wooden Chair Factory costs $12 per hour. The cost of each machine is $20 per day regardless of the number of chairs produced. Assume the number of machines does not change. If the factory produces at a rate of 78 chairs per hour, what is the total machine cost per day?

$40

What is the value of A?

$50

What is the value of D?

$50

Cindy's Car Wash has average variable costs of $2 and average fixed costs of $3 when it produces 100 units of output (car washes). The firm's total cost is

$500.

Each worker at the Wooden Chair Factory costs $12 per hour. The cost of each machine is $20 per day regardless of the number of chairs produced. What is the total daily cost of producing at a rate of 55 chairs per hour if the factory operates 8 hours per day?

$520

Each worker at the Wooden Chair Factory costs $12 per hour. The cost of each machine is $20 per day regardless of the number of chairs produced. If the factory produces at a rate of 70 chairs per hour and operates 8 hours per day, what is the factory's total labor cost per day?

$576

Let L represent the number of workers hired by a firm, and let Q represent that firm's quantity of output. Assume two points on the firm's production function are (L = 12, Q = 122) and (L = 13, Q = 132). Then the marginal product of the 13th worker is

10 units of output.

What is the marginal product of the second worker?

25 students

Average total cost (ATC) is calculated as follows:

ATC = (total cost)/(quantity of output).

Marginal cost tells us the

amount by which total cost rises when output is increased by one unit

The graph illustrates a typical total cost curve. Based on its shape, what does the corresponding production function look like?

an upward-sloping curve that increases at a decreasing rate

Curve D intersects curve C

at the efficient scale

Curve A represents which type of cost curve? a.

average fixed cost

Curve C represents which type of cost curve?

average total cost

Total cost can be divided into two types of costs:

fixed costs and variable costs

When adding another unit of labor leads to an increase in output that is smaller than the increases in output that resulted from adding previous units of labor, the firm is experiencing

diminishing marginal product

The marginal product of labor is equal to the

increase in output obtained from a one unit increase in labor.

In the long run,

inputs that were fixed in the short run become variable.

Curve D represents which type of cost curve?

marginal cost

Economists normally assume that the goal of a firm is to

maximize its profit.

For a firm, the production function represents the relationship between

quantity of inputs and quantity of output.

The Wooden Chair Factory experiences diminishing marginal product of labor with the addition of which worker?

the sixth worker

Charles's math tutoring company experiences diminishing marginal productivity with the addition of the

third worker.