question
What is production?
answer
The process of turning inputs into outputs
question
What is a production function ?
answer
Is the relationship between the quantity of inputs a firm uses and the quantity of output it produces
question
What is a fixed input?
answer
Is an input whose quantity is fixed for a period and cannot be varied
question
what is a variable input?
answer
is an input whose quantity he firm can vary at any time
question
What is the long run?
answer
the period in which all inputs can be varied
question
What is the short run?
answer
is the period in which at least one input is fixed
question
What is total product curve?
answer
shows how the quantity of output depends on the quantity of the variable input for a given quantity of the fixed input
question
what is Marginal Product ?
answer
is the change in output resulting from one-unit increase in the amount of labor input
question
If one worker makes 14 baskets,
two workers make 34 baskets,
three workers make 45 baskets, and
four workers make 50 baskets, which worker yielded the highest marginal product?
two workers make 34 baskets,
three workers make 45 baskets, and
four workers make 50 baskets, which worker yielded the highest marginal product?
answer
The second worker
question
What is a fixed cost?
answer
A cost that does not depend on the quantity of output produced
question
What is a variable cost ?
answer
Is a cost that depends on the quantity of output produced
question
What is total cost ?
answer
of producing a given quantity of output is the sum of the fixed coast and variable cost of producing that quantity of output
question
Formula for total cots?
answer
TC=FC+VC
question
What happen to the total cost curve as more output is produced ?
answer
Becomes steeper, a result of diminishing returns
question
Average total cost formula ?
answer
ATC=TC/Q
question
Average fixed cost formula ?
answer
AFC=VC/Q
question
Average variable cost formula ?
answer
AVC=VC/Q
question
The marginal cost curve intersects what?
answer
the average total cost curve from below, crossing it at its lowest point
question
In a long run fixed costs are ?
answer
May vary
question
The firm will choose its fixed cost i the long run based on the level of ?
answer
Output it expects to produce
question
What is the long run average total cost curve?
answer
Shows relationship between output and average total cost when fixed coast has been chosen to minimize average total cost for each level of output
question
The total product curve?
answer
...
question
You own a deli. Which of the following is most likely a fixed input at your deli?
answer
the dining room
question
The total cost curve for a snowmobile dealership shows how _____ cost depends on the quantity of _____.
answer
total; output
question
Once diminishing returns have set in, as output increases, the total cost curve?
answer
gets steeper
question
Buford Bus Manufacturing installs a new assembly line. As a result, the output per worker increases. The marginal cost of output at Buford?
answer
will decrease (the MC curve will shift down)
question
Marginal cost _____ over the range of increasing marginal returns and _____ over the range of diminishing marginal returns
answer
decreases; increases
question
In the short run, the average total cost curve slopes upward because of?
answer
diminishing returns
question
A business produces 10 pairs of eyeglasses. It incurs $30 in average variable cost and $35 in average total cost. The total fixed cost of producing 10 pairs of eyeglasses is?
answer
$50
question
When marginal cost is BELOW average variable cost, average variable cost must be?
answer
Falling
question
If your firm is operating in the negatively sloped portion of a long-run average total cost curve, then your production exhibits?
answer
Increasing returns to scale
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