Exam 8: Production Costs

The additional unit of output gained from one more unit of capital is the:

What best describes the long run?

Use the table The Cost of Producing Sandwiches. The table provides cost information for the first five sandwiches that are produced by a sandwich shop, but some information is missing. ​ A. What is the variable cost of the third sandwich? B. What is the marginal cost of the fourth sandwich? C. Are five sandwiches greater than, less than, or equal to the quantity where the marginal cost curve intersects the average total cost curve? Explain.

If the additional cost of one more unit is less than average total cost, then average total cost:

For each of the following, state whether the assertion is true or false, and justify your answer. A. If the marginal cost is rising, the average total cost is also rising. B. If the marginal product of labor is falling, the total product is rising at a slower rate. C. If the firm is producing at a level below minimum efficient scale in the long run, the average total cost is falling.