prod Econ 500 exam 3 - Assignment Essays

question

What is likely an economic cost but not an accounting cost

answer

rent that you could have gotten if you leased out your land instead of planting crops on it

question

ATC is at minimum when__

answer

ATC = MC

question

L shaped is-quants are associated with inputs which are____

answer

perfect complements

question

we can model the produce decisions as maximizing___ subject to

answer

output: a cost target

question

AVC is inversely related to ___

answer

average product (AP)

question

what is true at the cost minimizing bundle of inputs?

answer

marginal product per last dollar spent on each input is the same

question

If there is a per unit cost benefit from producing products simultaneously, a firm faces

answer

economics of scope

question

An industry that faces high entry cost and large fixed costs likely faces

answer

economics of scale

question

why is long run expansion less costly than short run expansion?

answer

flexibility to expand usage of all inputs

question

how should firms consider sunk costs when making future plans?

answer

sunk costs should not effect decisions

question

we use the term duality to describe?

answer

the mathematical and conceptual relationship between production and costs

question

if long run cost (LMC) is greater than long run average cost (LRAC) then the firm experiences

answer

diseconomies of scale

question

assume our only inputs to product are workers and machines. A machine cannot operate without a worker and it takes only one worker to operate a machine. The resulting isoquants will be

answer

L shaped

question

which of the following affects economic cost but not accounting cost

answer

opportunity cost

question

when we have labor as the only variable input what two things can reduce the marginal cost of producing one more unit of output

answer

decreasing wage or increasing MP of labor

question

if the long run marginal cost (LMC) is less than the long run average cost (LRAC) then the firm experiences

answer

economies of scale

question

consider the production function q=2K+3L. The isoquant for q=12 would be

answer

a straight line

question

which of the following is most likely a sunk cost for an agribusiness firm?

answer

cost of research and development

question

assuming we have one variable input, which of the following best describes the relationship between AP and AVC?

answer

inverse ( the move in opposite directions)

question

matching: economics of scale

answer

happen when LMC < LRAC

question

matching: diseconomies of scale

answer

results from decreasing returns to scale

question

matching: increasing returns to scale

answer

results in economies of scale

question

matching: decreasing returns to scale

answer

doubling inputs less than doubles output

question

matching: economies of scope

answer

there is a benefit from producing products simultaneously

question

if marginal cost (MC) is equal to average cost (ATC) then ATC is

answer

at a minimum

question

which of the following is most likely an accounting cost

answer

cost of pesticide used by an apple orchard

question

if something happens in the short run to make the productivity of labor (MPl) decrease, what will happen to the marginal cost of production (MC)

answer

MC will increases

question

which of the following can shift the production function

answer

improved technology

question

matching: marginal product of labor (MPl)

answer

can be negative

question

matching: total output

answer

reaches a maximum when Mpl = 0

question

average variable cost of q ( AVC)

answer

difference between ATC and AFC

question

matching: marginal cost of q (MC)

answer

decreases when MPl increases

question

if marginal product (MP) is greater than average product (AP) the ap is

answer

increases

question

a farmer is storing 30,000 bushels of corn. Her opportunity cost for doing this is

answer

equal to the return she could get if she sold the corn and invested the money from it elsewhere

question

an isoquant which is a straight line suggest that the two inputs are

answer

perfect substitutes

question

John Deere spent about $1.4 billion in 2015 on research and development across the entire company. This amount should most likely be considered a

answer

sunk cost

question

when we have labor as the only variable input what two things could cause an increase in average cost of output

answer

increasing wage or decreasing AP of labor

question

consider the production function q=4K+5L. what returns to scale does this function exhibit

answer

constant returns to scale

question

if marginal cost (MC) is greater than average cost (AC) then AC must be

answer

increases

question

assuming labor is the only variable input, which of the following would result in an increase in marginal cost of output

answer

decreasing marginal product of labor

question

a firm uses 100 units of L and 70 units of K to produce 1,500 units of output. They expand to 200 units of L and 140 units of K. As a result, they produce 2,900 units of output. This firm faces ___

answer

decreasing returns to scale

question

as we add more and more of an input, we expect that eventually

answer

marginal product of the input will decrease

question

if a firm faces diseconomies of scale then

answer

increasing output will increase AVC

question

diminishing marginal returns means that

answer

the benefit of using one more unit of productive input begins to decrease at some point

question

assuming labor is the only variable input, an increase In average product of labor (APl) will

answer

cause AVC to decrease

question

matching: MC > AVC

answer

AVC is increasing

question

matching: MC = AVC

answer

AVC is at a minimum

question

matching: MC < AVC

answer

AVC is decreasing

question

matching: ATC - AVC =

answer

AFC

question

matching: AVC is

answer

equal to MC at its minimum

question

matching: AFC is

answer

is always decreasing as q increases

question

matching: MC is

answer

is inversely related to MP

question

matching: FC is

answer

does not depend on level of q

question

matching: MC > AP

answer

AP is increasing

question

matching: MP =AP

answer

AP is at a maximum

question

MP < AP

answer

AP is decreasing

question

matching: Mp= 0

answer

q is at a maximum

1 of 57

question

What is likely an economic cost but not an accounting cost

answer

rent that you could have gotten if you leased out your land instead of planting crops on it

question

ATC is at minimum when__

answer

ATC = MC

question

L shaped is-quants are associated with inputs which are____

answer

perfect complements

question

we can model the produce decisions as maximizing___ subject to

answer

output: a cost target

question

AVC is inversely related to ___

answer

average product (AP)

question

what is true at the cost minimizing bundle of inputs?

answer

marginal product per last dollar spent on each input is the same

question

If there is a per unit cost benefit from producing products simultaneously, a firm faces

answer

economics of scope

question

An industry that faces high entry cost and large fixed costs likely faces

answer

economics of scale

question

why is long run expansion less costly than short run expansion?

answer

flexibility to expand usage of all inputs

question

how should firms consider sunk costs when making future plans?

answer

sunk costs should not effect decisions

question

we use the term duality to describe?

answer

the mathematical and conceptual relationship between production and costs

question

if long run cost (LMC) is greater than long run average cost (LRAC) then the firm experiences

answer

diseconomies of scale

question

assume our only inputs to product are workers and machines. A machine cannot operate without a worker and it takes only one worker to operate a machine. The resulting isoquants will be

answer

L shaped

question

which of the following affects economic cost but not accounting cost

answer

opportunity cost

question

when we have labor as the only variable input what two things can reduce the marginal cost of producing one more unit of output

answer

decreasing wage or increasing MP of labor

question

if the long run marginal cost (LMC) is less than the long run average cost (LRAC) then the firm experiences

answer

economies of scale

question

consider the production function q=2K+3L. The isoquant for q=12 would be

answer

a straight line

question

which of the following is most likely a sunk cost for an agribusiness firm?

answer

cost of research and development

question

assuming we have one variable input, which of the following best describes the relationship between AP and AVC?

answer

inverse ( the move in opposite directions)

question

matching: economics of scale

answer

happen when LMC < LRAC

question

matching: diseconomies of scale

answer

results from decreasing returns to scale

question

matching: increasing returns to scale

answer

results in economies of scale

question

matching: decreasing returns to scale

answer

doubling inputs less than doubles output

question

matching: economies of scope

answer

there is a benefit from producing products simultaneously

question

if marginal cost (MC) is equal to average cost (ATC) then ATC is

answer

at a minimum

question

which of the following is most likely an accounting cost

answer

cost of pesticide used by an apple orchard

question

if something happens in the short run to make the productivity of labor (MPl) decrease, what will happen to the marginal cost of production (MC)

answer

MC will increases

question

which of the following can shift the production function

answer

improved technology

question

matching: marginal product of labor (MPl)

answer

can be negative

question

matching: total output

answer

reaches a maximum when Mpl = 0

question

average variable cost of q ( AVC)

answer

difference between ATC and AFC

question

matching: marginal cost of q (MC)

answer

decreases when MPl increases

question

if marginal product (MP) is greater than average product (AP) the ap is

answer

increases

question

a farmer is storing 30,000 bushels of corn. Her opportunity cost for doing this is

answer

equal to the return she could get if she sold the corn and invested the money from it elsewhere

question

an isoquant which is a straight line suggest that the two inputs are

answer

perfect substitutes

question

John Deere spent about $1.4 billion in 2015 on research and development across the entire company. This amount should most likely be considered a

answer

sunk cost

question

when we have labor as the only variable input what two things could cause an increase in average cost of output

answer

increasing wage or decreasing AP of labor

question

consider the production function q=4K+5L. what returns to scale does this function exhibit

answer

constant returns to scale

question

if marginal cost (MC) is greater than average cost (AC) then AC must be

answer

increases

question

assuming labor is the only variable input, which of the following would result in an increase in marginal cost of output

answer

decreasing marginal product of labor

question

a firm uses 100 units of L and 70 units of K to produce 1,500 units of output. They expand to 200 units of L and 140 units of K. As a result, they produce 2,900 units of output. This firm faces ___

answer

decreasing returns to scale

question

as we add more and more of an input, we expect that eventually

answer

marginal product of the input will decrease

question

if a firm faces diseconomies of scale then

answer

increasing output will increase AVC

question

diminishing marginal returns means that

answer

the benefit of using one more unit of productive input begins to decrease at some point

question

assuming labor is the only variable input, an increase In average product of labor (APl) will

answer

cause AVC to decrease

question

matching: MC > AVC

answer

AVC is increasing

question

matching: MC = AVC

answer

AVC is at a minimum

question

matching: MC < AVC

answer

AVC is decreasing

question

matching: ATC - AVC =

answer

AFC

question

matching: AVC is

answer

equal to MC at its minimum

question

matching: AFC is

answer

is always decreasing as q increases

question

matching: MC is

answer

is inversely related to MP

question

matching: FC is

answer

does not depend on level of q

question

matching: MC > AP

answer

AP is increasing

question

matching: MP =AP

answer

AP is at a maximum

question

MP < AP

answer

AP is decreasing

question

matching: Mp= 0

answer

q is at a maximum

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