Chapter 6 Ag Econ

MC - Assume that the price of sorghum grain is $6.00 per bushel. When we apply 30 tons of fertilizer on our 20 acres of sorghum grain, the total yield is 1,000 bushels. When we apply 50 tons of fertilizer, the total yield is 1,500 bushels. What is the marginal value product per ton of fertilizer?

$150/ton

MC - What is the value of X in the table below

1,200 (add together the two boxes to the left of X)

MC - What is the value of Z in the table below?

1,500

MC - What is the value of Y in the table below?

1,700

MC - What is the value of W in the table below?

200 (same as box above it & W is the same and M)

MC - Which of the following is true? (has AFC + AVC = ATC in the choices)

All of the above

A profit-maximizing firm will use an input up to the point where the cost of the input equals the marginal revenue received by the firm

False

Is the point at which the marginal physical product (MPP) curve for a particular input is rising but still lies above the average physical product (APP) curve

Stage 1

MC - The stage of production where the total physical product (TPP) curve begins to decline corresponds to ...

Stage 3

MC - The marginal physical product of labor is ...

The amount of extra output that is produced when one extra worker is added and other factors of production are held constant

MC - Which of the following would provide the best evidence that a commodity is being produced under conditions of perfect competition?

The supply curve is perfectly inelastic

An example of average physical product (APP) in agriculture is the yield or number of bushels of corn produced per acre.

True

Average variable costs is equal to the firm's total variable costs divided by its total output

True

Marginal cost is the additional cost created by the next, or marginal unit of the variable input

True

The marginal value product for labor is equal to the marginal physical product for labor times the product price

True

The variable costs incurred by the business in the current period per unit of output

average variable cost

Level of output at which average total costs equal average revenue or market price

breakeven

Level of output at which average total costs (ATC) equal average revenue or market price

breakeven output

Specific form of current production costs that do not vary with the level of output or input use

fixed costs

As successive units of a variable input are added to a production process with the other inputs held constant, the marginal physical product (MPP) eventually decreases

law of diminishing marginal returns

The change in total cost of production as the output or total product of the business is expanded

marginal cost

The change in output or total product the business would achieve in the current period by expanding the use of an input by another unit

marginal physical product

The change in revenue earned by the business as it employees an additional unit of an input, holding other resource use constant

marginal value product

Level of input use where the marginal value product (MVP) equals the marginal input cost (MIP)

profit maximizing level of input use

Level of output at which average variable costs equal average revenue or the market price

shutdown output

The sum of all individual categories of production costs that do vary with the level of production

total variable cost