Exam 7: Supply: The Costs of Doing Business

If the average total cost of producing 2 pounds of cheese is $4 and the average total cost of producing 3 pounds of cheese is $4.2,then the marginal cost of producing third pound of cheese is equal to:

If long-run costs are plotted on the vertical axis and quantity of output plotted on the horizontal axis,a positively sloped line implies _____.

Which of the following is not a reason for economies of scale?

If labor is the only variable input,an increase in the quantity of labor:

If a firm is experiencing diminishing returns,then:

If average variable cost is falling,then:

In the oil tanker industry,large companies have lower risk and are able to optimize vessel utilization.If consolidation allows companies to lower their long-run average total costs,this is an example of:

The table given below shows the average total cost of production of a firm at different levels of the output. Table 7.5 -Refer to Table 7.5.At what level of production will the average total cost curve intersect the marginal cost curve?

The figure given below shows cost curves of a firm. Figure: 7.2 - In the figure, |: Marginal cost curve ||: Average total cost curve |||: Average variable cost curve Refer to Figure 7.2.At an output level of G:

Assume that one laborer produces 6 units of output,two laborers produce 14 units,three produce 20 units,and four produce 24 units.If the cost is $20 per unit of labor and fixed costs are $100,what is the average total cost at 14 units of output?

The table below shows the total cost of producing different units of a commodity. Table 7.2 - According to Table 7.2,the average variable cost of producing two units of output is:

If a firm experiences constant returns to scale throughout:

The figure given below shows cost curves of a firm. Figure: 7.2 -In the figure, |: Marginal cost curve ||: Average total cost curve |||: Average variable cost curve Refer to Figure 7.2.When Average Variable Cost (AVC) is at a minimum,which of the following is true?

The figure given below shows three Short Run Average Total Cost (SRATC) curves and the Long Run Average Total Cost (LRATC) curve of a firm. Figure 7.3 - Which of the following would account for the shape of the long-run average-total-cost curve in Figure 7.3?

With expansion in the level of output,total fixed cost:

As long as there are fixed resources,diminishing marginal returns will never exist.

The table given below shows the total fixed and variable costs of a firm. Table 7.3 - Using the information in Table 7.3 we can conclude that the marginal-cost curve intersects the average-variable-cost curve at ____ unit(s) of output.

The following table shows the cost of producing different units of ball point pens by a firm. Table 7.1 -Refer to Table 7.1.What will be the average fixed cost of producing five ball point pens?

If a firm experiences economies of scale throughout it will have a horizontal long-run average total cost curve.

In the long run,