Exam 11: Technology, Production, and Costs

Article Summary Due to changing shopping habits and increased online sales, Macy's announced it would be closing 100 stores in early 2017. The stores represent about 15 percent of its total locations, and some analysts believe the company needs to close an additional 100 stores as well. Macy's sales fell by 7.5 percent in the fourth quarter of 2016, and by the end of 2017, the company was expected to have about 600 stores open, down from almost 800 in 2014. Source: Hayley Peterson, "Macy's may shut down even more stores," Business Insider, May 12, 2017. -Refer to the Article Summary.Use a graph to illustrate average total cost curves for Macy's before and after closing the 100 stores.Assume that after closing the stores, Macy's will be producing at minimum average total cost.

If 11 workers can produce a total of 54 units of a product and a 12th worker has a marginal product of 6 units, then the average product of 12 workers is

The absolute value of the slope of an isocost line equals the ratio of

Table 11-7 Table 11-7 shows cost data for Lotus Lanterns, a producer of whimsical night lights. -Refer to Table 11-7.What is the average variable cost per unit of production when the firm produces 90 lanterns?

Average fixed cost can be calculated using any of the formulas below except

What is the difference between total costs, variable costs, and fixed costs?

Figure 11-7 Figure 11-7 shows the cost structure for a firm. -Refer to Figure 11-7.If output is 100 units, what is the fixed cost of production?

Which of the following statements is true?

Figure 11-13 -Refer to Figure 11-13.The lines shown in the diagram are isocost lines.Which of the following shows an increase in the firm's total cost while the price of labor and capital remain unchanged?

Figure 11-8 -Refer to Figure 11-8 above to answer the following questions. a.Identify the curves in the diagram. A ________ B ________ C ________ b.What is the numerical value of fixed cost when the quantity of output =10? c.What is the numerical value of variable cost when the quantity of output =10? d.What is the numerical value of total cost when the quantity of output =10? e.What is the numerical value of average fixed cost when the quantity of output =10? f.What is the numerical value of average total cost when the quantity of output =10? g.On the graph identify the area that represents the total variable cost of production when the quantity of output =10. h.On the graph identify the area that represents the fixed cost of production when the quantity of output =10.

When a firm's long-run average cost curve is horizontal for a range of output, then that range of production displays

Figure 11-12 -Refer to Figure 11-12.The movement from isoquant T to isoquant U depicts

Figure 11-1 -Refer to Figure 11-1.The average product of the 4th worker

As a firm hires more labor in the short run, the

When a firm experiences a positive technological change

Which of the following statements is false?

If average product is decreasing, then marginal product must be negative.

Which of the following statements is true?

What is the difference between explicit costs and implicit costs? List three examples each of explicit costs and implicit costs that may be experienced by a small business.

Some colleges now offer massive open online courses (MOOCs), where students do not need to be in the same classroom as their instructors.The fixed cost of an online course is relatively ________, but after the courses are placed online, the marginal cost of providing instruction to an additional student is ________.