Exam 13: The Costs of Production

Kate is a florist. Kate can arrange 20 bouquets per day. She is considering hiring her husband William to work for her. Together Kate and William can arrange 35 bouquets per day. What is William's marginal product?

Let L represent the number of workers hired by a firm, and let Q represent that firm's quantity of output. Assume two points on the firm's production function are (L = 5, Q = 125) and (L = 6, Q = 152). Then the marginal product of the 6th worker is

Consider the following information about baseball production at Bobby's Baseball Factory: Bobby pays all his workers the same wage, and labor is his only variable cost. From this information we can conclude that Bobby's average variable cost decreases

Table 13-8 -Refer to Table 13-8. What is the marginal cost of producing the fifth unit of output?

At all levels of production higher than the point where the marginal cost curve crosses the average variable cost curve, average variable cost

Constant returns to scale occur when a firm's

Scenario 13-14 If Farmer Brown plants no seeds on his farm, he gets no harvest. If he plants 1 bag of seeds, he gets 5 bushels of wheat. If he plants 2 bags, he gets 9 bushels. If he plants 3 bags, he gets 12 bushels. A bag of seeds costs $120, and seeds are his only cost. -Refer to Scenario 13-14. Farmer Brown's total-cost curve is

If a firm uses labor to produce output, the firm's production function depicts the relationship between

Scenario 13-1 Korie wants to start her own business making custom furniture. She can purchase a factory that costs $400,000. Korie currently has $500,000 in the bank earning 3 percent interest per year. -Refer to Scenario 13-1. If Korie purchases the factory with her own money, what is the annual implicit opportunity cost of purchasing the factory?

Scenario 13-13 Christine is an artist who creates custom cookie jars. Her annual revenue from selling the cookie jars is $90,000. The annual explicit costs of the materials used to make the cookie jars are $54,000. -Refer to Scenario 13-13. Christine used $5,000 from her personal savings account to buy pottery tools for her business. The savings account paid 1% annual interest. What is Christine's annual opportunity cost of the financial capital that she invested in her business?

Ryan sells 200 plastic ball point pens at $0.50 each. His total costs are $25. His profits are

Table 13-6 Wooden Chair Factory -Refer to Table 13-6. The Wooden Chair Factory experiences diminishing marginal product of labor with the addition of which worker?

Table 13-14 -Refer to Table 13-14. What is the total cost of producing 2 units of output?

For a construction company that builds houses, which of the following costs would be a fixed cost?

At low levels of production, the firm

Table 13-3 -Refer to Table 13-3. The marginal product of the fourth worker is

The Three Amigo's company produced and sold 500 dog beds. The average cost of production per dog bed was $50. Each dog be sold for a price of $65. The Three Amigo's total costs are

A firm produces 300 units of output at a total cost of $1,000. If fixed costs are $100,

Let L represent the number of workers hired by a firm, and let Q represent that firm's quantity of output. Assume two points on the firm's production function are (L=6,Q=147) and (L=7,Q=184). The marginal product of the seventh worker is

When a firm is experiencing diseconomies of scale, long-run