question
less than 8 chairs.
answer
If diminishing marginal returns have already set in for Golden Lark Woodworks, and the marginal product of the 6th carpenter is 8 chairs, then the marginal product of the 7th carpenter is
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capital
answer
Which of the following is a factor of production that generally is fixed in the short run?
question
10
answer
Suppose that a firm's production function is given by Y = 12 K L - L2, where K is the level of capital and L is the number of laborers the firm employs. For the given production function the marginal products are, MPL = 12 K - 2 L and MPK = 12 L. The rental rate of capital is $45 while the wage rate is $15.
What is the cost minimizing level of labor (L*) when the firm is producing 500 units of output?
What is the cost minimizing level of labor (L*) when the firm is producing 500 units of output?
question
the maximum output that can be produced from each possible quantity of inputs.
answer
The production function shows
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the firm has achieved the lowest possible average cost of production.
answer
At the minimum efficient scale,
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equals total cost of production divided by the level of output.
answer
The average total cost of production
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$15
answer
If the total cost of producing 20 units of output is $1,000 and the average variable cost is $35, what is the firm's average fixed cost at that level of output?
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TFC = TC - TVC.
answer
The formula for total fixed cost is
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the rate at which inputs can be substituted for each other keeping total output constant.
answer
The slope of an isoquant measures
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it can produce more output using the same inputs.
answer
A firm has successfully adopted a positive technological change when
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the prices of the two inputs.
answer
The absolute value of the slope of an isocost line equals the ratio of
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accounting cost.
answer
The explicit cost of production is also called
question
5 units.
answer
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
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change in total cost divided by the change in output.
answer
Marginal cost is equal to the
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all inputs can be varied.
answer
A characteristic of the long run is
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technology refers to the processes used by a firm to transform inputs into output while technological change is a change in a firm's ability to produce a given level of output with a given quantity of inputs.
answer
The difference between technology and technological change is that
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downward-sloping.
answer
If production displays economies of scale, the long-run average cost curve is
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AFC + AVC = ATC
answer
Which of the following equations is correct?
question
diseconomies of scale.
answer
If, when a firm doubles all its inputs, its average cost of production increases, then production displays
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additional cost of producing an additional unit of output.
answer
Marginal cost is the
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all the possible combinations of two inputs a firm can use that have the same total cost.
answer
An isocost line shows
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total costs of production.
answer
Higher isocost lines correspond to higher
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total fixed cost
answer
Which of the following costs will not change as output changes?
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operating in the short run.
answer
If a producer is not able to expand its plant capacity immediately, it is
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is equivalent to minimizing cost for a given level of output.
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Maximizing the level of output for a given total cost of production
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opportunity costs of capital owned and used by the firm
answer
Which of the following are implicit costs for a typical firm?
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2 chairs.
answer
If four workers can produce 18 chairs a day and five can produce 20 chairs a day, the marginal product of the fifth worker is
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the additional output that results when one more worker is hired, holding all other resources constant.
answer
The marginal product of labor is defined as
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50.
answer
When the average total cost is $16 and the total cost is $800, then the number of units the firm is producing is
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the combinations of two inputs that yield the same total product.
answer
An isoquant shows
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economies of scale.
answer
If, when a firm doubles all its inputs, its average cost of production decreases, then production displays
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the least-cost combination of inputs for each level of output.
answer
An expansion path shows
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$145.
answer
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 increases to $9.4 million. Within this range, the marginal cost of an additional unit of output is
question
economic costs add the opportunity costs of a firm using its own resources while accounting costs do not.
answer
Economic costs of production differ from accounting costs in that
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