Exam 11: Technology, Production, and Costs

Marginal cost is calculated for a particular increase in output by

Is it possible for technological change to be negative? If so, give an example.

Figure 11-2 -Refer to Figure 11-2.The curve labeled "E" is

Table 11-2 Table 11-2 summarizes production at the Crunchy Apple Orchard for the month of April. -Refer to Table 11-2.What is the marginal product of the 4th worker?

The production function shows

An expansion path shows

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?

Figure 11-15 -Refer to Figure 11-15.What is the combination of inputs that produces 200 gooseberry pies at the lowest cost?

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?

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

In economics, technology only refers to the development of new products.

Figure 11-13 -Refer to Figure 11-13.The lines shown in the diagram are isocost lines.A movement from CE to BD occurs when

A firm's short-run average total cost curve is parallel to its short-run average variable cost curve.

Vipsana's Gyros House sells gyros.The cost of ingredients (pita, meat, spices, etc.)to make a gyro is $2.00.Vipsana pays her employees $60 per day.She also incurs a fixed cost of $120 per day.Calculate Vipsana's variable cost per day when she produces 50 gyros using two workers?

Figure 11-14 Figure 11-14 shows the optimal input combinations for the production of a given quantity of cotton in the United States and in China. -Refer to Figure 11-14.Consider the following statements: A.For each country, the marginal product per dollar spent on labor equals to the marginal product per dollar spent on capital. B.The price of labor is relatively higher in the United States than in China and the price of capital is relatively lower in the United States than in China. C.The price of labor and the price of capital are relatively higher in the United States than in China. Based on the figure, which of the statements above is true?

Implicit costs can be defined as

The president of Toyota's Georgetown plant was quoted as saying, "Demand for high volumes saps your energy.Over a period of time, it eroded our focus [and] thinned out the expertise and knowledge we painstakingly built up over the years." Based on this quote, what must be true of the plant's average cost of production curve?

The total cost schedule shows the relationship between different amounts of inputs and the resulting level of output.

What are economies of scale? What are diseconomies of scale?

Use the following graph to answer the following questions. a.If the wage rate and the rental price of machines are both $50 and total cost is $800, is the cost-minimizing point A, B, or C? b.If the wage rate is $40, the rental price of equipment is $120, and total cost is $1,200, is the cost-minimizing point A, B, or C? c.If the wage rate is $60, the rental price of equipment is $90, and total cost is $1,800, is the cost-minimizing point A, B, or C?