question
The marginal product of the second laborer is _____ hats per day.
answer
(labor 2- labor 1) 50-20=30
question
Suppose the total cost of producing in the short run for a CD producer is $500,000 when 2,000,000 CDs are produced. Then:
answer
average total cost is 25 cents per CD, and average fixed cost is unknown given the available information.
question
A firm deciding how many workers it should hire to manufacture kitchen countertops using existing equipment is making a:
answer
short-run decision.
question
Which of the following is not true in the short run?
answer
TC/Q = TVC/Q
question
In the short run, firms:
answer
have at least one fixed input.
question
Cost that must be paid in the short run even when no output is produced are called:
answer
total fixed costs (TFC)
question
The downward-sloping portion of a LRAC curve implies:
answer
economies of scale exist over that range of output.
question
Which of the following is true for a firm in the short run?
answer
a) TVC = TC - TFC
b) TC = TVC + TFC
c) TFC = TC - TVC
d) All of the above are true
b) TC = TVC + TFC
c) TFC = TC - TVC
d) All of the above are true
question
The average total cost of producing a bell is $10 when Jenny's Jingles produces 100 bells. Total cost when zero bells are produced is $250. Total fixed cost for Jenny's Jingles is:
answer
$250
question
The long-run average cost curve (LRAC) is U-shaped due to:
answer
the existence of economies and dieconomies of scale
question
Average cost for the firm at a scale of production of 400,000 units is_____.
answer
$1,000,000/400,000=$2.50
question
Average product of Hal's Holiday Hats when 3 laborers are employed is _____ hats per day.
answer
25
question
If total output is 40 units when 4 workers are employed and 48 units when 5 workers are employed, then:
answer
a) average product is 10 when 4 workers are employed.
b) the marginal product of the 5th worker is 8 units.
c) average product must be falling because the marginal product of the 5th worker is lower than the average product of 4 workers.
d) all of the above are true.
b) the marginal product of the 5th worker is 8 units.
c) average product must be falling because the marginal product of the 5th worker is lower than the average product of 4 workers.
d) all of the above are true.
question
If a firm is experiencing disconomies of scale, doubling inputs will:
answer
increase, but less than double, output.
question
When output is 500 units, average variable cost (AVC) is equal to_____.
answer
$.80
question
The long run is:
answer
that period of time in which all factors of production are variable.
question
Moving from scale #1 to scale #2 will generate for the firm:
answer
economies of scale since long-run average costs fall.
question
Diminishing marginal product (or "diminishing returns") sets in with the _____ unit of labor hired
answer
third
question
In the long run:
answer
all inputs are variable, and average costs may decrease, remain constant, or increase as the scale of production changes.
question
If the marginal product of the fourth worker is 15 units of output, then the quantity of hats produced per day when four workers are employed is equal to _____.
answer
90
question
Accounting profit is equal to:
answer
...
question
The typical pattern is for a firm to experience:
answer
...
question
Economic profit is equal to:
answer
...
question
The short run is a period of time in which
answer
...
question
The long run is a period of:
answer
sufficient length to allow a firm to alter its plant size and capacity and all other factors of production.
question
Which of the following statements is true?
answer
...
question
When marginal cost is below average total cost:
answer
...
question
Fixed Cost
answer
a cost that does not change, no matter how much of a good is produced; TC-VC
question
Variable Cost
answer
0 workers= $0; 1=$25; 2=$50; etc. or AVCXQ
question
Total cost
answer
adding fixed and variable costs together or ATCXQ
question
Average Total Cost (ATC)
answer
total costs divided by quantity of output TC/Q
question
Average Fixed Cost (AFC)
answer
fixed cost divided by the quantity of output (FC/Q)
question
Average Variable Cost (AVC)
answer
variable cost divided by the quantity of output (VC/Q)
question
Average Total Cost (ATC)
answer
average fixed cost + average variable cost (AFC + AVC)
question
Marginal Cost (MC)
answer
Change in total cost divided by the change in quantity of output or Change in variable cost divided by the change in quantity of output
question
AFC and AVC
answer
Both U shaped
question
Average Product
answer
Q/L: the amount of output divided by the amount of an input used to produce it
question
Marginal Product
answer
change in quantity/change in labor
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