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which of the following is a factor of production for the Little Biscuit Bread Company
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flour
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a production function shows
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how a firm's production increases as it adds more labor
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labor productivity will increase in response to
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An increase in the amount of physical capital per worker.
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when a firm produces at a technically efficient output level, it is
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using the fewest resources to produce a good or service
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which of the following statements is not true regarding the production function and the production possibilities curve
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a production function tells us the maximum amount of output attainable from the use of all resources
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the change in total output associated with one additional unit of input it the
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marginal physical product
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which of the following is the slope of the production function with respect to an input
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the marginal physical product of the input
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diminishing returns occur because
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A firm increases the amount of a variable input without changing a fixed input.
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As an In and Out Burger restaurant increases the number of employees for a specific restaurant,
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efficiency will suffer as the restaurant becomes too crowded with employees
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the most desirable rate of output for a firm is the output that
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maximizes total profit
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marginal cost
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is the change in total cost from producing one additional unit of output
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the sum of fixed cost and variable cost at any rate of output is
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total cost
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in the short run, when a firm produces zero output, total cost equals
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fixed costs
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which of the following is most likely a fixed cost
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property taxes
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at any given rate of output, the difference between total cost and fixed cost is
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variable cost
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in the short run, which of the following is most likely a variable cost
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labor and raw materials costs
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in the long run, which of the following is likely to be a variable cost
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rent, wages, and all other costs are variable in the long run
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which of the following is always downward-sloping
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The average total cost curve when it is above the marginal cost curve.
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the average variable cost curve slopes upward with a higher rate of output in the short run because of
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the effect of diminishing returns
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if the marginal cost curve is rising, which of the following must be true
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total costs must be rising
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the average total cost (ATC) curve will be negatively sloped so long as
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marginal cost is less than average total cost
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explicit costs
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Are the sum of actual monetary payments made for resources used to produce a good.
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economic costs
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includes both implicit and explicit costs
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which of the following statements about the relationship between economic costs and accounting costs is true
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accounting costs are always less than or equal to economic costs
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the long-run average total cost curve is constructed from the
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lowest average total cost for producing each level of output
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economics of scale are reductions in average
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total cost that result from using operations of larger size
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When the size of a factory (and all its associated inputs) doubles and, as a result, output more than doubles,
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economies of scale must exist
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diseconomies of scale are reflected in
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The upward-sloping segment of the long-run average total cost curve.
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when the wage rate is $10 per hour and the MPP of a worker is 15 units per hour, the unit labor cost is
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$0.67 per unit
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Assuming labor is a variable input, an increase in labor productivity will result in
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a downward shift in the MC curve
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higher education levels and better management
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Shift the long-run ATC curve downward
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