Exam 7: Production and Cost

Samantha has been working for a law firm and earning an annual salary of $90,000.She decides to open her own practice.Her annual expenses will include $15,000 for office rent,$3,000 for equipment rental,$1,000 for supplies,$1,200 for utilities,and a $35,000 salary for a secretary/bookkeeper.Samantha will cover her start-up expenses by cashing in a $20,000 certificate of deposit on which she was earning annual interest of $1,000.Assuming that there are no additional expenses,Samantha's annual explicit costs will equal

-Figure 7-8 shows three different cost curves,labeled A,B,and C,for a firm.Which of these curves could most likely represent average total cost?

When the marginal product of labor increases as the amount of labor employed increases,

-Figure 7-1 shows the amounts of coal that a mining company could produce per week by changing the number of workers while capital and technology remain constant.How many workers could the mine hire before the marginal product of labor begins to decline?

Which of the following is most likely to be a fixed input in the short run for Joe's Garage?

Suppose that minimum efficient scale is approximately 20 percent of maximum potential market demand.In that case,

Which of the following would be an excellent example of a lumpy input

If the marginal product of labor rises,the marginal cost of output

If significant economies of scale continue as output increases,

The short run for Barbara's Bakery is defined as

Which of the following is true about the relationships among various cost curves?

A firm's total cost of production is

A merger wave can be set off

The marginal product of labor is the

For a given level of output,the short-run total cost of production

To produce a firm's current output level,total cost is $600,and the total variable cost is $450.Therefore,the firm has

A firm's total cost of production is the

A firm's cost of variable inputs per unit of output is known as

If a firm experiences constant returns to scale at all output levels,then its long-run average total cost curve would

-Consider the total product curve depicted in Figure 7-5.The firm experiences the greatest marginal returns to labor