Exam 14: Production and Cost

Labor (workers) Output (bikes) Total fixed costs (dollars) Total variable cost (dollars) Total cost (dollars) 0 0 200 1 20 100 2 50 3 60 4 64 -The table above gives costs at Jan's Bike Shop.Unfortunately,Jan's record keeping has been spotty.Each worker is paid $100 a day.Labor costs are the only variable costs of production.What is the total cost of producing 50 bikes?

When marginal cost is positive,total cost is ________ as output increases.

In the short run,firms increase output

The law of decreasing returns states that as a firm uses more of a

Professor Rush decided to quit teaching economics and opens a shoe store out at the mall.He gave up an annual income of $50,000 to open the store.A year after opening the shoe store,the total revenue for the year was $200,000.Rush's expenses were $30,000 for labor,rent was $18,000,and utilities were $1,200.He also had to purchase new shoes from manufacturers,at a cost of $60,000,which was financed by cashing in his savings of $60,000 that had been in a bank earning 8 percent per year.The normal profit from operating a shoe store in the mall is $20,000.Determine Professor Rush's explicit costs,implicit costs,and economic profit.

Which of the following is an implicit cost? i.wages paid to workers ii.the normal profit iii.the electric bill

The figure above shows some of a firm's cost curves. -Based on the figure above,curve D is the firm's

If total fixed cost increases,which of the following will NOT change?

This month,the local widget factory produced 100 widgets.The total variable cost of production was $500 and the average total cost of production was $8. a.What is the total cost? b.What is the total fixed cost? c.What is the average fixed cost? d.What is the average variable cost?

When the marginal product of an additional worker is less than the marginal product of the previous worker,there are ________ returns to labor.

A firm's fundamental goal is

John fishes for a living.Last year,he sold $100,000 of fish.Bait,nets and other fishing supplies cost John $10,000 and he paid $40,000 in salaries to his helpers.Depreciation on his boat and other equipment,as calculated using IRS rules,was $15,000.What was John's profit as would be calculated by an accountant?

How do we calculate average fixed cost and why does average fixed cost fall as output increases?

Quantity of labor (workers) Total product (lawns mowed per hour) 0 0 1 2 2 5 3 8 4 15 5 22 6 26 7 28 -The table above shows the total product schedule for Rick's Lawn Service,a yard care company.When does the average product of labor equal the marginal product of labor?

If we know the amount of total cost,average total cost,average variable cost,and marginal cost for each level of output,how can we find the level of output where the marginal product is the greatest?

The main source of economies of scale is

Decreasing marginal returns occur in the short run as more labor is hired to work in a fixed sized plant because

In the long run,

Labor (workers) Output 0 0 1 20 2 50 3 70 4 80 5 85 -The table above shows a total product schedule.Suppose that labor costs $20 per worker and fixed costs are $60.The total variable cost of producing 80 units equals

The main source of economies of scale is