microeconomics ch 8

Refer to the table to the right which shows cost data for Lotus Lanterns, a producer of whimsical night lights. What is the total variable cost of production when the firm produces 115 lanterns

$1,157

Refer to the table to the right which shows cost data for Lotus Lanterns, a producer of whimsical night lights. What is the average total cost of production when the firm produces 120 lanterns

$14

When a firm produces 50,000 units of output , its total cost equals $6.5 million. When it increases its production to 70,000 units of output, its total cost increased to $9.4 million . Within this range, the marginal cost of an additional unit of output is

$145

Average fixed costs of production

fall as long as output is increased

Refer to the diagram to the right. The average product of the 4th worker

is 17

A firm has successfully adopted a positive technological change when

it can produce more output using the same inputs

Which of the following is not a source of technological advancement for a producer

outsourcing some aspect of production

The figure to the right shows the cost structure for a firm. When the output level is 100 units average fixed cost is

$8

The figure to the right shows the cost structure for a firm. When output level is 100, what is the total cost of production

$2,000

Refer to the table to the right which shows cost data for Lotus Lanterns, a producer of whimsical night lights. What is the marginal cost per unit of production when the firm produces 100 lanterns

$32

Vispana's Gyros House sells gyros. The cost of ingredients (pita, meat, spices, etc) to make a gyro is $2.00. Vispana pays her employees $60 per day. She also incurs a fixed cost of $120 per day. Calculate Vispana's total cost per day when she produces 50 gyros using two workers

$340

Golda Rush quit her job as a manager for Home Depot to start her own hair dressing salon, Goldilocks. She gave up a salary of $40,000 per year, invested her savings of $30,000 (which was earning 5 percent interest) and borrowed $10,000 from a close friend, agreeing to pay 5 percent interest per year. In her first year, Golda spent $18,000 to rent a salon, hired a part-time assistant for $12,000 and incurred another $15,000 in expenses on equipment and hairdressing material. Based on this information, what is the amount of her implicit costs

$41,500

Golda Rush quit her job as a manager for Home Depot to start her own hair dressing salon, Goldilocks. She gave up a salary of $40,000 per year, invested her savings of $30,000 (which was earning 5 percent interest) and borrowed $10,000 from a close friend, agreeing to pay 5 percent interest per year. In her first year, Golda spent $18,000 to rent a salon, hired a part-time assistant for $12,000 and incurred another $15,000 in expenses on equipment and hairdressing material. Based on this information, what is the amount of her explicit costs

$45,500

Refer to the table to the right which shows the technology of production at the Matsuko's Mushroom Farm for the month of May. What is the average product of labor when the farm hires 5 workers

10.8 bushels

Refer to the diagram to the right. The marginal product of the 3rd worker is

15

Refer to the table to the right which shows the technology of production at the Matsuko's Mushroom Farm for the month of May. Diminishing marginal returns sets in when the ___ is hired

3rd

Refer to the table to the right which shows the technology production at the Matsuko's Mushroom Farm for the month of May. What is the marginal product of the 4th worker

5 pounds

If 11 workers can produce a total of 54 units of a product and a 12th worker has a marginal product of 6 units, then the average product of 12 workers is

5 units

Which of the following equations is correct

AFC + AVC = ATC

Which of the following is a reason why a firm would experience diseconomies of scale

As the size of the firm increases it becomes more difficult to coordinate the operations of its manufacturing plants

Refer to the diagram to the right. Identify the curves in the diagram

E = marginal cost curves, F = average total cost curve, G = average variable cost curve, H= average fixed cost curve

If the marginal cost curve is below the average variable cost curve, then

average variable cost is decreasing

Which of the following statements best describes the economic short run

If it is a period during which at least one of the firm's inputs is fixed

Which of the following explains why the marginal cost curve has a U shape

Initially, the marginal product of labor rises, then falls

Refer to the diagram to the right. Identify the minimum efficient scale of production

Qb

Refer to the diagram to the right. The vertical difference between curves F and G measures

average fixed costs

Marginal cost is the

additional cost of producing an additional unit of output

Refer to the diagram to the right. Diminishing returns to labor set in

after L1

If production displays economies of scale, the long run average cost curve is

downward sloping

Economic cost of production differ from accounting costs in that

economic cost adds the opportunity cost of a firm using its own resources while accounting cost does not

If, when a firm doubles all its inputs, its average cost of production decreases, then production displays

economies of scale

The average total cost of production

equals cost of production divided by the level of output

Which of the following is an implicit cost of production

rent that could have been earned on a building owned and used by the firm

The law of diminishing marginal returns states

that at some point, adding more of a variable input to a given amount of a fixed input, will cause the marginal product of the variable input to decline

Refer to the diagram to the right. Diminishing marginal productivity sets in after

the 2nd worker is hired

The marginal product of labor is defined as

the additional output that results when one more worker is hired, holding all other resources constant

Refer to the diagram to the right. The curve labeled "E" is

the marginal product curve

Refer to the diagram to the right. The average product of labor declines after L2 because

the marginal product of labor is below the average product of labor

The production function shows

the maximum output that can be produced from each possible quantity of inputs

The basic activity of a firm is

to use inputs to produce outputs of goods and services