Exam 7: Production Costs

Suppose when a car wash has 2 washing stations and 5 workers and is able to wash 100 cars per day. When it adds a third station, but no more workers, it is able to wash 150 cars per day. The marginal product of the third washing station is:

For the law of diminishing returns to be present, we must have:

What is the difference between economic and accounting profit? Why is a distinction between them important?

Which of the following is true at the point where diminishing returns set in?

If two workers can produce 22 units of output, and the addition of a third worker increases output to 30 units, the marginal product of the third worker is:

Exhibit 7-10 Short-run cost schedule for book publisher's hourly production In Exhibit 7-10, the average variable cost of producing 2 cases of books is:

Economic profit is:

A bus is mostly filled with passengers and ready to travel from Los Angeles to San Francisco. At the last minute, a person comes running up to the bus and takes a seat. The change in the bus company's total cost as a result of transporting one more passenger on this trip is called:

Both the marginal cost and the average variable cost curves are U-shaped. At the minimum point on the average variable cost curve, the marginal cost must be:

If the marginal cost of the 5,000th unit is $0.06 and the average total cost of the 5,000th unit is $0.10:

The law of diminishing marginal returns implies that, in the short run:

The decreasing portion of a firm's long run average cost curve is attributable to:

Which of the following is true if the total variable cost curve is increasing at an increasing rate?

During the short-run period of the production process, a firm will be:

If the long-run average cost of producing 50 units of Good X is $3.00 and the long run average cost of producing 51 units of Good X is $3.25, the firm is

What is the shape of the average total cost curve for a firm in the short run?

Suppose that when output is 20, marginal cost is $20, and average total cost is $30. Then which of the following is most likely to be true?

Exhibit 7-15 Long-run average cost In Exhibit 7-15, diseconomies of scale are shown in the range of:

Which of the following best describes a production function?

Paul's Plumbing is a small business that employs 12 people. Which of the following is the best example of an implicit cost incurred by this firm?