Exam 7: Production and Costs

Kelly, who grows geraniums to sell, is currently producing a level of output at which her marginal cost equals her average variable cost. Which of the following best describes Kelly's average variable cost at this level of output?

Which of the following does NOT describe average fixed cost?

When marginal product is increasing, which of the following statements regarding cost is accurate?

What do economists normally assume to be the goal of a firm?

A firm is producing 200 units of output at a total cost of $1000. The firm's average variable cost equals $4 per unit. What does the total fixed cost equal?

What is average fixed cost?

FIGURE 7-3 -Refer to Figure 7-3. Which is the marginal cost curve?

Which of the following does NOT describe the long-run production period?

Which of the following most accurately describes what must be occurring if marginal cost is increasing?

This figure shows the long-run average total cost curve for a firm that produces basketballs, along with four short-run average total cost curves. Each of the short-run average total cost curves corresponds to a different plant size. SRATC₁ corresponds to Plant size 1, SRATC₂ corresponds to Plant size 2, and so forth. FIGURE 7-6 -Refer to Figure 7-6. Which plant size is optimal for the firm to produce qB units of output each week?

Which of the following is an example of an explicit cost of production?

Which of the following best describes production in the short run?

TABLE 7-1 -Refer to Table 7-1. With which additional picker does the total product of labour diminish?

What is the term for the change in total cost that results from the production of one additional unit of output?

According to economists, which of the following statements best describes the opportunity cost of a good?

Which of the following most accurately describes the long-run period?

Which of the following is NOT an explicit cost for the owner of a local pizza parlour?

A firm's total fixed cost equals $2500. What would the firm's average fixed cost be at 10 units of output?

Why does the short-run average total cost curve eventually turns upward to form a U-shape?

Which of the following statements regarding the cost curves illustrates the situation when a firm experiences increasing returns to scale at all levels of output?