Exam 13: The Costs of Production.

Table 13-10 Eileen's Elegant Earrings produces pairs of earrings for its mail order catalogue business. Each pair is shipped in a separate box. She rents a small room for $150 a week in the downtown business district that serves as her factory. She can hire workers for $275 a week. There are no implicit costs. -Refer to Table 13-10.What is the marginal product of the second worker?

Scenario 13-16 A certain firm produces and sells staplers. Last year, it produced 7,000 staplers and sold each stapler for $6. In producing the 7,000 staplers, it incurred variable costs of $28,000 and a total cost of $45,000. -Refer to Scenario 13-16.The firm's fixed cost was

The difference between accounting profit and economic profit is

Scenario 13-4 Suppose that Abdul opens a coffee shop. He receives a loan from a bank for $100,000. He withdraws $50,000 from his personal savings account. The interest rate on the loan is 8%, and the interest rate on his savings account is 2%. -Refer to Scenario 13-4.Abdul's implicit cost of capital is

Profit equals total revenue minus total cost.

Table 13-12 Betty's Bakery -Refer to Table 13-12.What is the marginal cost of the 8th cake at Betty's Bakery?

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 marginal cost of producing 9 units of output (using 2 bags of seed)is

When average total cost rises if a producer either increases or decreases production,then the firm is said to be operating at efficient scale.

When marginal cost exceeds average total cost,

Marginal cost equals

Some costs do not vary with the quantity of output produced.Those costs are called

Marginal cost tells us the

Profit is defined as

If a firm experiences constant returns to scale at all output levels,then its long-run average total cost curve would

Cody builds mailboxes.If he charges $20 for each mailbox,his total revenue will be

Table 13-2 -Refer to Table 13-2.What is the marginal product of the third worker?

According to the mathematical laws that govern the relationship between average total cost and marginal cost,where must these two curves intersect?

Figure 13-9 The figure below depicts average total cost functions for a firm that produces automobiles. -Refer to Figure 13-9.At output levels greater than N,the firm experiences

Table 13-15 Consider the following table of long-run total cost for four different firms: -Refer to Table 13-13.Which firm has economies of scale and then diseconomies of scale as output increases from 1 to 7?

How would a production function that exhibits decreasing marginal product affect the shape of the total cost curve? Explain or draw a graph.