Exam 8: Technology, production, and Costs

Figure 8-6 Figure 8-6 contains information about the short run cost structure of a firm. -Refer to Figure 8-6.In the figure above which letter represents the marginal cost curve?

Which of the following statements is true?

If marginal product is greater than average product,then

Academic book publishers hire editors,designers,and production and marketing managers who help prepare books for publication.Because these employees work on several books simultaneously,the number of people the company hires will not go up and down with the quantity of books the company publishes during any particular year.The salaries and benefits of people in these job categories will be included in

What is the difference between "diminishing marginal returns" and "diseconomies of scale"?

The division of labor and specialization explain

If diminishing marginal returns have already set in for Golden Lark Woodworks,and the marginal product of the 6th carpenter is 8 chairs,then the marginal product of the 7th carpenter is

Are the costs of utilities always fixed,always variable,or can they be both? Briefly explain.

Sally quit her job as an auto mechanic earning $50,000 per year to start her own business.To save money she operates her business out of a small building she owns which,until she started her own business,she had rented out for $10,000 per year.She also invested her $20,000 savings (which earned a market interest rate of 5% per year)in her business.You are given the following information about the first year of her operations. Total revenue $120,000 Cost of labor 40,000 Cost of materials 15,000 Equipment rental 5,000 a.Calculate her economic costs. b.Calculate her accounting costs. c.Calculate her implicit costs. d.Sally tells you that she would really like to move to a location closer to town but she decided against it because "right now I don't pay any rent and it will cost me $10,000 a year to rent near town." Do you agree with her reasoning?

The formula for total fixed cost is

When firms analyze the relationship between their level of production and their costs they separate the time period involved into

State the law of diminishing returns.How do diminishing returns differ from diseconomies of scale? Be sure to define diseconomies of scale in your answer.

The explicit cost of production is also called

Assume that you observe the long-run average cost curve of ACME Bookstores,a national chain.Starting from the point on the curve where output is zero and moving to the right which of the following lists the behavior of long-run average costs in the correct sequence (that is,which will be observed first,second,etc.)?

At the minimum efficient scale

What is the marginal product of labor and what is the average product of labor.

Figure 8-1 -Refer to Figure 8-1.The average product of the 4th worker

Figure 8-4 -Refer to Figure 8-4.What happens to the average fixed cost of production when the firm increases output from 150 to 200?

Average fixed costs of production

If a firm produces 20 units of output and incurs a total cost of $1,000 and a variable cost is $700,calculate the firm's average fixed cost of production if it expands output to 25 units.