Exam 8: Production Technology and Cost

Long-run cost curves are generally steeper than short-run cost curves.

You are the owner and only employee of a company that repairs computers.Last year,you earned total revenues of $75,000.Your costs for equipment,rent,and supplies were $10,000.To start this business you quit a job at another computer software firm that paid $40,000 a year.Last year,your economic profits were:

A large or a small wind turbine have similar installation,operating and maintenance costs,however,a large turbine has four times the generating capacity but costs less than three times as much as a small turbine,the average cost of generating electricity with wind is:

If Mayo Lawyer Firm's total costs are $7000 when 20 clients' cases are worked and $7600 when 21 clients' cases are worked,the marginal cost of the 21st client's case is:

Table 8.1 -Refer to Table 8.1.Suppose Mr.B withdrew $50,000 from his account that earned 10% to invest into this business.He quit his full-time job that paid $40,000 to manage this business.Mr.B's implicit cost equals:

World's Best Chair Co.has produced 30 chairs at a total cost of $300.The next chair produced will add $10 to the company's total cost.Which of the following is definitely TRUE if the 31st chair is produced?

Economic costs are measured by all monetary payments.

Comment on the following statement: "The shape of the long-run average cost curve is determined by diminishing returns."

An informational good,such as a music video,has a ________ first-copy cost and a_______ marginal cost.

Table 8.5 -Refer to Table 8.5.If Sherry produces one pair of earrings,her total variable costs are:

Table 8.1 -Refer to Table 8.1.Suppose Mr.B withdrew $50,000 from his account that earned 10% to invest into this business.He quit his full-time job that paid $40,000 to manage this business.If Mr.B is excited about his $45,000 profit,an economist would:

The difference between the short run and long run is a firm's flexibility in choosing inputs.

Table 8.4 -Refer to Table 8.4.There are diminishing returns to labor for:

If a firm spends $200 to produce 20 units of output and spends $440 to produce 40 units of output,then the marginal cost of increasing output is:

Table 8.7 -Complete Table 8.7.

A firm's objective is to maximize its economic profit,which is:

If the fixed cost of producing a good is very high,but the marginal cost is low and constant,then the average total cost will:

Which of the following is an example of economies of scale?

-Refer to Figure 8.7.If six microwave ovens are produced,Micro Oven's average total costs are:

Marginal costs typically: