Sec 10 retake

(Figure 55-2: Short-Run Costs) Point D corresponds to the

intersection of marginal and average variable cost.

The long run is a planning period:

long enough such that a firm can consider all inputs as variable.

(Figure 55-2: Short-Run Costs) A is the ________ cost curve.

marginal

The ________ is the increase in output obtained by hiring an additional worker.

marginal product

The change in total output resulting from a one-unit increase in the quantity of an input used, holding the quantities of all other inputs constant, is:

marginal product.

(Figure 55-2: Short-Run Costs) Point E corresponds to the

minimum of average total cost.

(Table 55-1: Cost Data) The table shows some cost data for a firm currently operating in the short run. What is the value of the total variable cost for this firm when the firm is producing five units of output?

$190

Pauli's Pizza offers the following prices: one slice for $2, two slices for $3.50, three slices for $4.50, four slices for $5.00. Sal orders two slices. From this we know that Sal's marginal benefit from the second slice must be at least ________ while the marginal benefit from the third slice must be less than ________.

$3.50; $1.00

(Figure 55-1: Average Total Cost Curve) In the figure, the total cost of producing five pairs of boots is approximately:

$408

(Table 55-1: Cost Data) The table shows some cost data for a firm currently operating in the short run. What is the value of the total fixed cost for this firm?

$50

Sarah's accountant tells her that she made a profit of $43,002 running a pottery studio in Orlando. Sarah's husband—an economist—claims Sarah lost $43,002 running her pottery studio. This means her husband is claiming that she incurred ________ in ________ costs.

$86,004; implicit

(Table 55-2: Output and Costs) Using the information in the table, when quantity equals three, average total cost equals:

17

(Table 54-1: Labor and Output) Referring to the table, the marginal product of the fifth worker is:

4

(Table 55-2: Output and Costs) Using the information in the table, when quantity equals four, total variable cost equals:

48

(Table 53-3: Revenue and Cost of Gizmos) At what level of output is marginal revenue equal to marginal cost for this seller of gizmos?

5

(Table 55-2: Output and Costs) Using the information in the table, when quantity increases from one to two, marginal cost equals:

8

(Table 54-1: Labor and Output) Referring to the table, the average product when four workers are employed is:

9

Sunk costs:

are not considered in marginal analysis.

(Figure 55-2: Short-Run Costs) B is the ________ cost curve.

average total

(Figure 56-1: Long-Run Average Cost) Output per period in the region A to B indicates that a firm is experiencing:

constant returns to scale.

(Figure 56-1: Long-Run Average Cost) Output per period in the region B to C indicates that a firm is experiencing:

diseconomies of scale.

Accounting profit differs from economic profit because:

economic costs are generally higher than accounting costs because economic costs include all opportunity costs, while accounting costs include only explicit costs.

(Figure 56-1: Long-Run Average Cost) Output per period in the region from 0 to A indicates that a firm is experiencing:

economies of scale.

A cost that does not change with the level of output produced is called a:

fixed cost

An input whose quantity cannot be changed during the short run is a:

fixed input

Melanie's printing and copying shop wants to produce more output. In the short run, Melanie can:

hire more workers to operate a third shift.

You own a small deli that produces sandwiches, soups, and other items for customers in your town. Which of the following is a fixed input in the production function at your deli?

the dining room where customers eat their meals

The implicit cost of capital is:

the opportunity cost of capital used by a business.

If marginal costs of production are greater than marginal revenue from sales:

too much of the good is being produced.

Profit is the difference between ________ and ________.

total revenues; total costs

In the long run, all costs are:

variable

An input whose quantity can be changed during the short run is a:

variable input.