Exam 22: The Firm: Cost and Output Determination

A firm has the following production relationship between labor and output, for a fixed capital stock. -According to the above table, what is the average product of labor when three laborers are employed?

Average total cost equals

The ratio of total costs to the quantity produced is referred to as

"If an industry's minimum efficient scale is between 2,000 and 4,000 units of output, then a firm producing 2,000 units of output in that industry has a cost-saving advantage over another firm producing 4,000 units of output in the same industry." Do you agree or disagree? Explain.

What is the law of diminishing marginal product? Is it a realistic concept for describing the real world? Explain.

Marginal physical product and average physical product are measured in

In economics, the planning horizon is defined as

The difference between the short run and the long run is

For an industry in which average costs continue to decline as output rises, what would you expect the minimum efficient scale to be? Explain your answer.

The change in total costs due to a one-unit change in the production rate is

Which of the following statements is true?

Fixed costs include all but

-In the above figure, if this firm produces output level Q₂, it has average total costs of

-Refer to the above table. What are total costs at an output of 2 units?

-Using the above table, we see that when output is 4 units, average variable cost equals

Economies of scale occur when there are

As long as marginal product of labor exceeds the average product of labor, then average product of labor

Notice the costs as given in the table below. What is the marginal cost when total cost is $23?

In the long run, a firm can change

Constant returns to scale are illustrated by