Exam 22: Production and Costs

__________ scale exist when inputs are increased by some percentage and output increases by a smaller percentage,whereas __________ scale exist when inputs are increased by some percentage and output increases by the same percentage.

Accounting profit equals economic profit if __________ equals __________.

Economies of scale are exclusively a long-run phenomenon,while the law of diminishing returns applies to both the short-run and to the long-run.

There is a monitorless team (firm)of 10 persons.The 10 persons agree to work together and split the revenue (they earn)equally.In this setting,the cost of shirking to an individual is

Exhibit 22-1 -Refer to Exhibit 22-1.Diminishing marginal returns set in with the addition of which unit of the variable input?

As the marginal physical product curve rises,

If the marginal cost (MC)curve is rising and is above the average fixed cost (AFC)curve,then

Cy recently went into the business of producing and selling cardboard boxes.For this business,which of the following is most likely to be a fixed cost?

Which of the following is true?

Exhibit 22-14 Assume that labor is the only variable input. -Refer to Exhibit 22-14.What is the marginal cost of producing this good with 3 and 4 laborers working [blanks (G)and (H)],respectively?

Economies of scale are said to exist when inputs are increased by some percentage and output increases by a(n)__________ percentage,causing unit costs to __________.

Exhibit 22-5 -Refer to Exhibit 22-5.Diseconomies of scale are present between

Noble Prizewinner Ronald Coase argued that firms exist in order to reduce transaction costs.

One of the reasons why economies of scale exist is that the opportunity for labor specialization increases as the size of the firm grows.

Which of the following statements is true?

There is a link between production and cost.We know this because

Exhibit 22-3 -Refer to Exhibit 22-3.The average fixed cost of producing 25 units of output is

Exhibit 22-11 -Refer to Exhibit 22-11.Marginal cost of the first unit of output is

Which of the following is true of average fixed costs in the long run?

Exhibit 22-13 -Refer to Exhibit 22-13. What dollar amounts go in blanks (E)and (F)?