Exam 14: Production and Cost

Dr.Khan starts his own dental practice after quitting his $150,000 job at The Mall Dental Clinic.His revenues for the first year are $500,000.He paid $90,000 in rent for the dental office, $60,000 for his office manager's salary, $24,000 for the dental hygienist, $150,000 for insurance, and $6,000 for other miscellaneous costs.The normal profit from running his business is $20,000.

Economies of scale can occur as a result of which of the following?

The marginal product of labor is

The figure above shows some of a firm's cost curves. -Curve C is the firm's

Decreasing marginal returns

-The above table has the total product schedule for Jesse's Lawn Service. a∙In the figure, label the axes and then graph the total product curve. b∙Find the average product for the different amounts of employment.

When the marginal product is increasing as the quantity increases, then as the quantity increases the

Which of the following is true?

Bill is an economics professor who earns $37,000 teaching but decides to leave and fulfill his dream of catering barbecues.During his year of barbecuing he earned total revenue of $60,000.He spent $30,000 on food and supplies.He also paid his wife $10,000 to help serve food.The normal profit for an entrepreneur running a barbecue business is $3,000.Bill also rented an industrial grill/fry truck for $12,000.Bill had an economic

Explain how new technologies, which increase productivity, affect the average variable cost, average total cost, and marginal cost curves.

Increasing marginal returns to labor

Which of the following costs can be positive when output is zero?

Which of the following is correct about marginal and average products?

The U-shape of the average variable, average total, and marginal cost curves reflects

To produce 10 shirts, the total cost is $80; to produce 11 shirts, the total cost is $99.The marginal cost of the 11th shirt is equal to

Which average cost curves are U-shaped?

If 5 workers can wash 30 cars a day and 6 workers can wash 33 cars a day, then the marginal product of the 6th worker equals

Jessica is a young doctor who has just started her own practice.Her previous position paid her $80,000 a year.For office space, she uses a building which she owns and which she has rented in the past for $40,000 a year.Her total revenue from her new practice is $250,000.She pays $50,000 to other firms for materials and supplies, and she pays $40,000 in wages to her office nurse.Assume that Jessica's building and equipment do not depreciate and that her normal profit is $20,000. a∙Which of Jessica's costs are explicit costs and what is their total? b∙Which of Jessica's costs are implicit costs and what is their total? c∙What is the opportunity cost of all factors of production employed by Jessica? d∙What is Jessica's economic profit?

The figure above shows a firm's total product curve. -Which of the points show efficient production points?

-The table above shows a total product schedule.Suppose that labor costs $20 per worker and fixed costs are $60.The average total cost of producing 80 units equals ________ per unit.