Exam 13: The Costs of Production

Mike just finished designing a new coffee cup for his manufacturing business and is considering if the new cup will be profitable to manufacture.When calculating total costs involved in manufacturing this new coffee cup, which of the following should not be considered?

In the long run:

Marginal cost is equal to average total cost when:

The relationship between the quantity of inputs and quantity of output is called the production function.

The average total cost curve is increasing when marginal cost is:

Because of the greater flexibility that firms have in the long run, all short-run cost curves lie on or above the long-run curve.

Opportunity costs are comprised of:

The fact that many decisions are fixed in the short run but variable in the long run has an impact on the firm's cost curves.

Adam Smith's example of the pin factory demonstrates that economies of scale result from specialisation.

According to the information provided, Amy's accountant would most likely figure the total cost of her photograph developing to be:

Which of the following costs do not vary with the amount of output a firm produces?

Industrial organisation is the study of how:

The marginal product of labour can be defined as (where $\Delta$ denotes 'change'):

Jeremy, a small business owner, earns can $50 an hour repairing boats.One afternoon he takes 5 hours off work to build a gazebo in his garden, spending $200 on materials.If the addition of a gazebo increases his home's value by $400, then his economic profit will be:

What are opportunity costs? How do explicit and implicit costs relate to opportunity costs?

Accounting profit is equal to which of the following? (i) economic profit + implicit costs (ii) total revenue - implicit costs (iii) total revenue - opportunity costs

If the long-run average total cost curve is flat, then what does this imply about specialisation? What will be the firm's efficient scale?

John is a self-employed bricklayer.Examples of his variable costs include:

Average fixed cost will:

Implicit costs that do not require a money outlay are typically ignored by economists.