Exam 6: Production Costs

As a fishing firm hires its first, second, and third workers, it could find that marginal product actually rises. The reason for this is:

All of a firm's inputs are considered to be variable in the long run.

In the long run, all costs are fixed costs.

What are the seven short run cost calculations? How are they related?

Exhibit 6-10  Short-run cost schedule for book publisher's hourly production In Exhibit 6-10, the publisher's fixed cost is equal to:

A firm's average fixed cost curve can never be U-shaped, even if its other average cost curves are U-shaped.

Exhibit 6-2  Cost schedule for pizza production Exhibit 6-2 shows the labor, energy, and materials cost of making various quantities of pizzas. The table shows that the materials cost of making pizzas will:

Exhibit 6-8  Costs schedules for producing pizza Which of the following is true about average fixed cost?

Which of the following explains most accurately why the firm's short-run marginal cost curve will eventually rise?

Exhibit 6-1  Production of pizza data Exhibit 6-1 shows the change in the production of pizzas as more workers are hired. The marginal product of the labor input begins to fall with the employment of the ____ worker.

Paul's Plumbing is a small business that employs 12 people. Which of the following is most likely to be a fixed cost for Paul's Plumbing?

Which of the following statements is true ?

The long run is a planning period:

Economic profit is:

If a firm increases output and its average total cost rises, then the firm is experiencing economies of scale.

An economist left his $100,000-a-year teaching position to work full-time in his own consulting business. In the first year, he had total revenue of $200,000 and business expenses of $150,000. She made a(n):

Since the 1980s, Wal-Mart stores have appeared in almost every community in America. Wal-Mart buys their goods in large quantities and therefore at cheaper prices. Wal-Mart also locates its stores where land prices are low, usually outside of the community business district. Many customers shop at Wal-Mart because of low prices and free parking. Local retailers, like the neighborhood drug store, often go out of business because they lose customers. This story demonstrates that:

When costs that vary with the level of output are divided by the output, you have calculated:

A farm can produce 10,000 bushels of wheat per year with 5 workers and 13,000 bushels with 6 workers. The marginal product of the sixth worker for this farm is:

Which of the following represents the key difference between the short run and the long run?