Exam 8: Production Technology and Cost

You are the manager and owner of E-Bulbs Inc.and you know that your factory experiences economies of scale.You want to quantify the extent of scale economies in the production of E-Bulbs Inc.,so you need to find

When an increase in a firm's scale of production leads to higher average costs,the firm is experiencing

Recall the Application about the marginal cost involved in producing crude oil to answer the following question(s). -Recall the Application.As the volume of crude oil increases,the marginal cost of production initially increases at a ________ rate and then eventually increases at a ________ rate.

The increase in total cost that results from producing one more unit of output is the fixed cost.

Economic profits are determined by subtracting implicit costs from total revenue.

-Which segment of the LAC in Figure 8.9 represents constant returns to scale?

If a firm's long-run average cost curve is horizontal,the firm is experiencing economies of scale.

Table 8.5 -Refer to Table 8.5.If Sherry produces three pair of earrings,her total variable costs are

World's Best Chair Co.has produced 30 chairs at a total cost of $300.The next chair produced will add $10 to the company's total cost.Which of the following is definitely true if the 31st chair is produced?

-Refer to Figure 8.3.Micro Oven's total fixed costs are

Whenever the marginal cost is less than the average cost,the average cost is falling.

-Refer to Figure 8.5.The marginal cost of the third oven is

How is a long-run average cost curve different from a short-run average cost curve? How are they related?

Table 8.5 -Refer to Table 8.5.If Sherry produces one pair of earrings,her total variable costs are

A firm's short-run total cost (TC)is equal to

When an increase of a firm's scale of production leads to lower average costs per unit produced,economies of scale are present.

Recall the Application about the manufacture of fake killer whales used to scare sea lions off the Washington coast to answer the following question(s). -Recall the Application.According to the Application,it would cost about $16,000 to make the first whale,including $11,000 for the mold and $5,000 for labor and materials.Once the mold is made,each additional whale would cost an additional $5,000.Why is the mold an indivisible input?

The short run can be defined as any period of time

-Refer to Figure 8.8.Curve 1 is Outdoor Equipment's

-Refer to Figure 8.2.The marginal product of the third worker is