Exam 13: The Costs of Production.

Scenario 13-10 Walter builds birdhouses. He spends $5 on the materials for each birdhouse. He can build one in 30 minutes. He is semi-retired but earns $8 per hour at the local hardware store. He can sell a birdhouse for $20 each. -Refer to Scenario 13-10.An economist would calculate the total cost for one birdhouse to be

Scenario 13-2 Chelsea wants to start her own Christmas ornament business. She can purchase a suitable factory that costs $100,000. Chelsea currently has $150,000 in the bank earning 3 percent interest per year. -Refer to Scenario 13-2.Suppose Chelsea purchases the factory using her own money.What is Chelsea's annual implicit opportunity cost of purchasing the factory?

Firms may experience diseconomies of scale when

Table 13-8 -Refer to Table 13-8.What is the shape of the marginal cost curve for this firm?

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

David's firm experiences diminishing marginal product for all ranges of inputs.The total cost curve associated with David's firm

Marginal costs are costs that do not vary with the quantity of output produced.

Suppose that a firm has only one variable input,labor,and firm output is zero when labor is zero.When the firm hires 6 workers the firm produces 90 units of output.Fixed costs of production are $6 and the variable cost per unit of labor is $10.The marginal product of the seventh unit of labor is 4.Given this information,what is the average total cost of production when the firm hires 7 workers?

Scenario 13-8 Ellie has been working for an engineering firm and earning an annual salary of $80,000. She decides to open her own engineering business. Her annual expenses will include $15,000 for office rent, $3,000 for equipment rental, $1,000 for supplies, $1,200 for utilities, and a $35,000 salary for a secretary/bookkeeper. Ellie will cover her start-up expenses by cashing in a $20,000 certificate of deposit on which she was earning annual interest of $500. -Refer to Scenario 13-8.Ellie's annual accounting costs will equal

Table 13-3 -Refer to Table 13-3.At which number of workers does diminishing marginal product begin?

Average total cost is increasing whenever

Walter used to work as a high school teacher for $40,000 per year but quit in order to start his own painting business.To invest in his painting business,he withdrew $20,000 from his savings,which paid 3 percent interest,and borrowed $30,000 from his uncle,whom he pays 3 percent interest per year.Last year Walter paid $25,000 for supplies and had revenue of $60,000.Walter asked Tyler the accountant and Greg the economist to calculate his painting business's profit.

Total revenue equals

Which of the following statements is not correct?

Which of the following statements is correct?

Economic profit is greater than or equal to accounting profit.

A firm produces 400 units of output at a total cost of $1,200.If fixed costs are $200,

Economies of scale arise when

Which of the following measures of cost is best described as "the increase in total cost that arises from an extra unit of production?"

Figure 13-2 -Refer to Figure 13-2.As the number of workers increases,