Exam 21: Production and Costs

At 1,000 units of output, total cost is $42,000 and total variable cost is $34,000. At 1,000 units of output, what is the value of average total cost, average variable cost, and average fixed cost, respectively?

If the quantity of output rises as more of a variable input is added to a fixed input,

The marginal physical product (MPP) of a variable input is

As a firm produces more units of a good, its

Exhibit 21-8 ​ -Exhibit 21-8 shows how output varies with the only variable input used in its production. If the cost of a unit of labor is $500, what is the approximate marginal cost of the 185th unit of output?

Exhibit 21-14 Assume that labor is the only variable input and that each additional laborer is paid $600. -Refer to Exhibit 21-14. What is the level of output with 2 and 3 laborers working [blanks (A) and (B)], respectively?

The law of diminishing marginal returns holds for a situation in which

Exhibit 21-3 ​ -Refer to Exhibit 21-3. The average variable cost of producing 45 units of output is

"As additional units of a variable input are added to a fixed input, eventually the marginal physical product of the variable input will decline." This is a statement of the

Five months ago Wilson opened up a health club. Which of the following is an implicit cost related to the health club?

Describe the difference between market coordination and managerial coordination. Give an example of each to support your answer.

An economist might say, "The market guides and coordinates individuals' actions." Which of the following is an example of this happening?

As the marginal physical product of a variable input __________, the marginal cost __________.

As long as there are __________ costs, __________ profit will be greater than __________ profit.

If marginal cost is rising, average total cost must also be rising.

Exhibit 21-13 ​ -Refer to Exhibit 21-13. What dollar amounts go in blanks (G) and (H), respectively?

Economies of scale, constant returns to scale and diseconomies of scale account for the shape of the __________ cost curve.

Economists Alchian and Demsetz suggest that firms are formed when

-Refer to Situation 21-4. What are Joe's accounting profits?

Exhibit 21-4 ​ -Refer to Exhibit 21-4. Curve B is a(n) __________ cost curve.