Exam 4: Production and the Costs of Production

Miller Technologies has average variable costs of $6 and average total costs of $10 when it produces 1,000 units of output. The firm's total fixed costs equal

A firm's explicit costs include all of the following except

The marginal product of labor is equal to the change in output that results from changing labor by one unit, holding all other inputs fixed.

A technological improvement that increases productivity will

When the law of diminishing returns sets in,

The fixed costs of General Foods would include all of the following except

Smith Tire Co. has total fixed costs of $100,000 per year. The firm's average variable cost is $80 for 10,000 tires. At that level of output, the firm's average total costs equal

Figure 4.1 Total Product Curves -Refer to Figure 4.1. The shift in the total product curve represents an increase in the firm's

The marginal cost curve and average total cost curve of General Electric will shift downward if the firm realizes technological advances, a reduction in resource prices, or a decrease in taxes.

Marginal cost is defined as

In response to a change in demand, a firm can employ more or fewer variable inputs, but not alter the capacity of its factory, in the short run.

Figure 4.1 Total Product Curves -Refer to Figure 4.1. Which of the following could explain why the total product curve shifted?

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

Normal profit includes the opportunity cost of all of the following except the

______ represents the minimum profit necessary to keep a firm in operation.

If the addition of yet ever more workers continues to increase output, but by successively smaller increments, a firm realizes increasing marginal returns.

The principle that explains the rising portion of the marginal product curve is the law of diminishing marginal returns.

An economist would argue that accountants tend to understate profits and overstate losses.

The marginal cost curve intersects the average total cost and average variable cost curves at their maximum points.

Suppose that Sara's Sandwich Shop initially encounters diminishing marginal returns when it begins production of meatball sandwiches. In this range of output, its marginal product is