ECON Quiz 5: Chapter 7

(Figure 21.2) What is the marginal cost of the 120th unit of output?

$288.00

(Table 21.5) The total cost of 3 units of output is

$30.

(Figure 21.1) The marginal physical product of the third unit of labor is

12.0 units per day.

(Figure 21.4) A firm that produces between 600 and 800 units per period should choose a plant with a short-run average total cost function of

ATC2 only.

Megan used to work at the local pizzeria for $15,000 per year but quit in order to start her own deli. To buy the necessary equipment, she withdrew $20,000 from her inheritance (which paid 8 percent interest). Last year she paid $25,000 for ingredients and $500 per month rent but had revenue of $50,000. She asked her dad the accountant and her mom the economist to calculate her costs for her.

Dad says her cost is $31,000, and Mom says her cost is $47,600.

When the average total cost curve is rising, the marginal cost curve will be

above the average total cost curve.

Sam's surf shop has total costs of $2,000 when it is not producing any surfboards. This means that

fixed costs are $2,000.

Greater labor productivity means

higher output per worker.

The period in which there are no fixed costs is the

long run.

In the short run, when a firm produces zero output, the variable cost equals

zero.