Exam 6: Perfectly Competitive Supply

Refer to the accompanying table. To increase output from 33 to 66 units requires ________ extra employee(s)per day; to increase output from 66 to 99 units requires ________ extra employee(s)per day.

An increase in the price a firm receives for its output will lead the firm to:

Suppose Ben owns a small company that makes kites. The market for kites is perfectly competitive, and kites sell for $25 each. Ben's total production costs vary depending on the number of kites he makes each day, as shown in the accompanying table.   $\begin{array} { | c | c | } \hline \text { Number d kites Per Day } & \text { Tutal Cast Per Day (\$) } \\\hline 0 & 100 \\\hline 1 & 110 \\\hline 2 & 126 \\\hline 3 & 148 \\\hline 4 & 172 \\\hline 5 & 200 \\\hline 6 & 235 \\\hline\end{array}$   What is the profit-maximizing number of kites for Ben to make each day?

Suppose a perfectly competitive firm is producing 77 units of output, and the marginal cost of the 77ᵗʰ unit is 11. If the firm can sell each unit of output for $8 and the firm's revenue is sufficient to cover its variable cost, the firm should:

A variable factor of production:

A perfectly competitive firm's supply curve is the portion of its ________ cost curve that lies above its ________ cost curve.

Suppose Chris is a potter who makes mugs. His total costs depend on the number of mugs he makes each day, as shown in the accompanying table. Number d Mugs Per Day Tatal Cast Per Day 0 \ 10 1 \ 14 2 \ 19 3 \ 25 4 \ 32 5 \ 40 6 \ 49   When Chris produces 5 mugs per day, his average variable cost is ________.

The accompanying table describes the relationship between the number of workers hired by a call center each hour and the number of calls the call center can make each hour. The call center has only 1 telephone. The telephone costs the firm $5/hour (regardless of how many calls are made), and each worker is paid $10 per hour.   Given the information in the table above, what is the call center's marginal cost when it goes from making 6 to 16 calls an hour?

If a production process exhibits diminishing returns, then as output rises:

Suppose Sarah owns a small company that makes wedding cakes. The accompanying table shows how Sarah's total cost varies depending on the number of wedding cakes she makes each day. Number of Cales Per Day Tatal Cast Per Day 0 \ 100 1 \ 180 2 \ 220 3 \ 300 4 \ 400 5 \ 520 6 \ 660   If the market for wedding cakes is perfectly competitive, and wedding cakes sell for $95 each, then Sarah should produce ________ cakes per day.

If a perfectly competitive firm can sell each unit of output for $9, and the marginal cost of the last unit produced is $8.50, then the:

Assume that each day a firm uses 13 employee-hours per day and an office to produce 100 units of output. The price of each unit output is $5, the hourly wage rate is $10, and rent on the office is $200 per day. Each day the firm earns a ________ of ________.

Suppose Sarah owns a small company that makes wedding cakes. The accompanying table shows how Sarah's total cost varies depending on the number of wedding cakes she makes each day. Number of Cales Per Day Tatal Cast Per Day 0 \ 100 1 \ 180 2 \ 220 3 \ 300 4 \ 400 5 \ 520 6 \ 660   When Sarah produces 2 cakes per day, her average variable cost is ________.

Suppose Sarah owns a small company that makes wedding cakes. The accompanying table shows how Sarah's total cost varies depending on the number of wedding cakes she makes each day. Number of Cales Per Day Tatal Cast Per Day 0 \ 100 1 \ 180 2 \ 220 3 \ 300 4 \ 400 5 \ 520 6 \ 660   The marginal cost of the 4ᵗʰ wedding cake per day is ________.

Suppose a perfectly competitive firm is producing 37 units output, and the marginal cost of the 37ᵗʰ unit is $3. If the firm can sell each unit of output for $5 and the firm's revenue is sufficient to cover its variable cost, the firm should:

John is trying to decide how to divide his time between his job as a stocker in the local grocery store, which pays $7 per hour for as many hours as he chooses to work, and cleaning windows for the businesses downtown. He makes $2 for every window he cleans. John is indifferent between the two tasks, and the number of windows he can clean depends on how many hours he spends cleaning in a day, as shown in the accompanying table.     A second hour cleaning windows will yield additional earnings of ________.

Suppose Chris is a potter who makes mugs. His total costs depend on the number of mugs he makes each day, as shown in the accompanying table. Number d Mugs Per Day Tatal Cast Per Day 0 \ 10 1 \ 14 2 \ 19 3 \ 25 4 \ 32 5 \ 40 6 \ 49   If Chris's fixed costs decrease, then in the short run, his profit-maximizing level of output will:

Which of the following would be considered a factor of production in the provision of bus service?

Refer to the accompanying figure. If the market for doughnuts is perfectly competitive, then assuming this firm can earn enough revenue to cover its variable cost, it should produce:

John is trying to decide how to divide his time between his job as a stocker in the local grocery store, which pays $7 per hour for as many hours as he chooses to work, and cleaning windows for the businesses downtown. He makes $2 for every window he cleans. John is indifferent between the two tasks, and the number of windows he can clean depends on how many hours he spends cleaning in a day, as shown in the accompanying table.   John's benefit from his first hour cleaning windows is: