Exam 13: The Costs of Production

Table 13-6 Adrian's Premium Chocolates produces boxes of chocolates for its mail order catalogue business. She rents a small room for $150 a week in the downtown business district that serves as her factory. She can hire workers for $275 a week. There are no implicit costs. -Refer to Table 13-6.During the week of July 4th,Adrian doesn't box any chocolates.What are her costs during the week?

Scenario 13-5 A certain firm produces and sells staplers. Last year, it produced 7,000 staplers and sold each stapler for $6. In producing the 7,000 staplers, it incurred variable costs of $28,000 and a total cost of $45,000. -Refer to Scenario 13-5.The firm's fixed costs amounted to

Which of the following would be categorized as an implicit cost? (i) forgone investment opportunities (ii) wages of workers (iii) raw materials costs

When adding another unit of labor leads to an increase in output that is smaller than the increases in output that resulted from adding previous units of labor,we have the property of

Figure 13-5 -Refer to Figure 13-5.Which of the following can be inferred from the figure above? (i) Marginal cost is increasing at all levels of output. (ii) Marginal product is increasing at low levels of output. (iii) Marginal product is decreasing at high levels of output.

What effect,if any,does diminishing marginal product have on the shape of the marginal cost curve?

When a factory is operating in the short run,

At all levels of production beyond the point where the marginal cost curve crosses the average variable cost curve,average variable cost

Suppose a certain firm is able to produce 165 units of output per day when 15 workers are hired.The firm is able to produce 176 units of output per day when 16 workers are hired (holding other inputs fixed).Then the marginal product of the 16th worker is

The cost of producing the typical unit of output is the firm's

The average total cost curve is unaffected by diminishing marginal product.

Scenario 13-5 A certain firm produces and sells staplers. Last year, it produced 7,000 staplers and sold each stapler for $6. In producing the 7,000 staplers, it incurred variable costs of $28,000 and a total cost of $45,000. -Refer to Scenario 13-5.In producing the 7,000 staplers,the firm's average fixed cost was

Table 13-3 -Refer to Table 13-3.Each worker at Gallo's cork factory costs $12 per hour.The cost of each machine is $20 per day regardless of the number of corks produced.What is the total daily cost of producing at a rate of 55 units per hour if Gallo's operates 8 hours per day?

Scenario 13-2 Zach took $400,000 out of the bank and used it to start his new cookie business. The bank account pays 3 percent interest per year. During the first year of his business, Zach sold 6,000 boxes of cookies for $2.50 per box. Also, during the first year, the cookie business incurred costs that required outlays of money amounting to $9,000. -Refer to Scenario 13-2.Zach's accounting profit for the year was

The amount of money that a wheat farmer could have earned if he had planted barley instead of wheat is

When comparing short-run average total cost with long-run average total cost at a given level of output,

Which of the following is an implicit cost?

The amount by which total cost rises when the firm produces one additional unit of output is called

Diminishing marginal product suggests that the marginal

Diminishing marginal product suggests that