Econ 510 E2

changes in the price of an input cause

slope changes in the isocost line.

if quantity demanded for sneakers falls by 6 percent when price increases 20 percent, we know that the absolute value of the own price elasticity of sneakers is

0.3

suppose the cost function is C(Q)=50+Q-10Q2+2Q3. what is the variable cost of producing 10 units?

1010

suppose the cost function is C(Q)=50+Q-10Q2+2Q3. what is the total cost of producing 10 units?

1060

if apples have an own price elasticity of -1.2 we know the demand is

elastic

fixed costs exist only in

the short run

suppose you are a manager of a factory. you purchase five (5) new machines at one million dollars each. if you can resell two of the machines for $500,000 and three of the machines for $200,000, what are the sunk costs of purchasing the machines?

$3.4 million

according to the table below, what is the total cost of producing 125 units of output

2,400

the marginal product of capital of producing 2,991 units of output (find point a) in the table below

26.7

suppose the production function is given by q=3k+4l. what is the marginal product of capital when 5 units of capital and 10 units of labor are employed?

3

according to the table below, what is the marginal cost of producing 90 inputs of output

8.75

economies of scope exist when

C(Q1)+C(Q2)>C(Q1,Q2)

the demand for labor by a profit maximizing firm is determined by

VMPL=W

the costs of production include

accounting costs and opportunity costs

which curve does the marginal cost curve intersect at the minimum point?

average total cost curve and average variable cost curve

the production function Q=L.5K.5 is called

cobb douglas

suppose the demand for good x is ln qxd=21-0.8 in px-1.6 ln py+6.2 ln M+0.4 ln ax. then we know good x and y are

complements

the elasticity which shows the responsiveness of the demand for good due to changes in the price of a related good is the

cross-price elasticity

average fixed cost

declines continuously as output is expanded

suppose the long-run average cost curve is U-shaped. when LRAC is in the increasing stage, there exist

diseconomies of scale

the elasticity that measures the responsiveness of consumer demand to changes in income is the

income elasticity

the quantity consumed of a good is relatively unresponsive to changes in price whenever demand is

inelastic

an income elasticity less than zero tells us that the good is

inferior good

isoquants are normally drawn with a convex shape because

inputs are not perfectly substituable

the combinations of inputs that produce a given level of output are depicted by

isoquants

costs that are forever lost after they have been paid are

sunk costs

which of the following conditions is true when a producer minimizes the cost of producing a given level of output

the MRTS is equal to the ratio of input prices, and the marginal product per dollar spent on all inputs is equal

the long run is defined as

the horizon in which the manager can adjust all factors of production

an isoquant defines the combination of inputs that yield the producer

the same level of output

costs that change as output changes are

variable costs

suppose the production function is given by q=3k+4l. what is the average product of capital when 10 units of capital and 10 units of labor are employed?

7

the production function in the table below exhibits decreasing marginal returns to capital over what output range

between 2,391 and 3,048

when marginal cost curve is below an average cost curve, average cost is

declining with output

the change in total output attributable to the last unit of an input is the

marginal product