Exam 8: Technology,Production,and Costs

Explain whether each of the following is a fixed cost or a variable cost for Damian Dandridge's tattoo parlor. a.The payment he makes to buy tattoo ink. b.The wages he pays his employees. c.The $500-per-month payment he makes to advertise his shop on highway billboards. d.The lease payment he makes to the landlord who owns the building where his shop is located. e.The payment he makes on his liability insurance policy.

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 ________.

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

If a firm is experiencing diseconomies of scale,its long-run average cost curve is increasing.

When a firm experiences negative technological change it can produce the same output with fewer inputs.

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?

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 law of diminishing marginal returns states

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

Which of the following are examples of a firm experiencing a positive technological change? a.A firm is able to reduce its inputs by 15 percent and still produce the same level of output. b.A seminar attended by the firm's workers makes them more productive. c.A firm adds 5 percent to its workforce and is able to maintain its initial level of output. d.A firm restructures its distribution system and is able to save on its shipping times. e.A firm rearranges its warehouse and finds that it can use fewer workers to maintain its productivity level.

Figure 8-11 Figure 8-11 illustrates the long-run average cost curve for a firm that produces picture frames. The graph also includes short-run average cost curves for three firm sizes: ATCₐ, ATCb and ATCc. -Refer to Figure 8-11.In the short run,if the firm sells fewer than 5,000 picture frames per month

Increases in the marginal product of labor result from

Which of the following statements is false?

Table 8-7 Quantity of Lanterns Fixed Cost (dollars) Variable Cost (dollars) Total Cost (dollars) Average Total Cost (dollars) 75 200 170 370 4.93 80 200 230 430 5.36 90 200 7.67 100 200 810 11.8 115 200 12.5 117 200 1264 1464 120 200 1480 Table 8-7 shows cost data for Lotus Lanterns, a producer of whimsical night lights. -Refer to Table 8-7.What is the average variable cost per unit of production when the firm produces 90 lanterns?

As output increases,the distance between average total cost and average variable cost increases.

Average total cost is equal to

Implicit costs can be defined as

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

In the long run

Figure 8-5 -Refer to Figure 8-5.The vertical difference between curves F and G measures