Exam 6: Production Costs

Exhibit 6-1  Production of pizza data Exhibit 6-1 shows the change in the short run production of pizzas as more workers are hired. The table shows marginal product increasing between the 0 to 2 hired workers. A possible reason for this increased marginal product is:

Exhibit 6-8  Costs schedules for producing pizza By filling in the blanks in Exhibit 6-8, the marginal cost of the sixth pizza is shown to be equal to:

Which of the following is considered to be a fixed cost of operating an automobile?

In the short run, a firm will eventually experience rising per-unit costs because of:

Which of the following factors of production is not variable in the long run?

Which of the following would be considered an implicit cost?

If total cost is $1,000 when output is zero, and total cost is $1,200 when output is one, and total cost is $1,500 when output is two, then which of the following is true ?

Which of the following is not a source of economies of scale?

The marginal product curve rises when the marginal cost curve rises.

Suppose that a small business takes in monthly revenue of $100,000. Labor, rental, energy, and other purchased input costs are $70,000. The owner/entrepreneur could earn $5,000 per month in another job, and the owner/entrepreneur could get a return of $5,000 each month if she sold her business and invested the net proceeds in a financial asset, such as a treasury bond. Which of the following correctly describes her monthly economic profit?

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

Exhibit 6-6  Total cost curves In Exhibit 6-6, the total fixed cost is:

Exhibit 6-16  Long-run average cost curves In Exhibit 6-16, which firm's long-run average cost curve experiences constant returns to scale?

​ The law of diminishing returns causes a firm's short-run marginal cost curve to be s-shaped.

Exhibit 6-7  Cost schedule for a firm In Exhibit 6-7, by filling in the blanks, it can be determined that the marginal cost of the third unit of output is:

Economies of scale imply that within some range one can increase the size of operation and:

Which of the following best describes total fixed cost?

Unlike implicit costs, explicit costs:

If fixed cost is $200,000 and variable cost is $30 per unit over the relevant range of output, when 10,000 units are produced, the average total cost will be:

Exhibit 6-7  Cost schedule for a firm In Exhibit 6-7, by filling in the blanks it can be determined that the fixed costs are