Exam 14: Production and Cost

-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?

Increasing marginal returns to labor

Jill runs a factory that makes lie detectors in Little Rock,Arkansas.This month,Jill's 34 workers produced 680 machines.Jill's average product of labor equaled ________ lie detectors per worker.

A firm's utility bill is a variable cost.If the cost of utilities increases,then in the figure above ________ upward.

The short-run average total cost,average variable cost,and marginal cost curves are all U-shaped because of i.constant total fixed cost. ii.increasing and then decreasing marginal returns as more labor is hired. iii.economies and diseconomies of scale as the plant size increases.

Jessica is a young doctor who has just started her own practice.Her previous position paid her $80,000 a year.For office space,she uses a building which she owns and which she has rented in the past for $40,000 a year.Her total revenue from her new practice is $250,000.She pays $50,000 to other firms for materials and supplies,and she pays $40,000 in wages to her office nurse.Assume that Jessica's building and equipment do not depreciate and that her normal profit is $20,000. a.Which of Jessica's costs are explicit costs and what is their total? b.Which of Jessica's costs are implicit costs and what is their total? c.What is the opportunity cost of all factors of production employed by Jessica? d.What is Jessica's economic profit?

-The table above shows the total product schedule for Rick's Lawn Service,a yard care company.Increasing marginal returns

What is the relationship between the marginal product of labor and the marginal cost?

The long run is a time period in which

-The above table gives the total cost schedule for oil changes at the local Jiffy Lube. a.What is Jiffy Lube's total fixed cost? b.What is the total variable cost of 2 oil changes? c.What is the average variable cost of 4 oil changes? d.What is the average fixed cost of 2 oil changes? e.What is the marginal cost of the 3rd oil change?

Are the short-run average total cost curve and the long-run average cost both U-shaped for the same reasons? If so,carefully explain these reasons.If not,explain why each curve is U-shaped.

Increasing marginal returns always occurs when the

Which of the following is an explicit cost of production?

-In the above figure,curve A is the ________ curve and curve B is the ________ curve.

Which of the following statements is true?

-The above table has the total product schedule for Jesse's Lawn Service. a.In the figure,label the axes and then graph the total product curve. b.Find the average product for the different amounts of employment.

If average variable costs increase as output increases,then

Which curve shows the lowest average total cost at which it is possible to produce each output when the firm has time to change both its labor force and plant size?

-The table above shows the total product schedule for Rick's Lawn Service,a yard care company.The total product schedule shows

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