Exam 13: The Costs of Production

Figure 13-1 Suppose the production function shifts from TP1 to TP2. -Refer to Figure 13-1.In this diagram,the shift in the total product curve represents an increase in the firm's

Scenario 13-4 Wanda owns a lemonade stand.She produces lemonade using five inputs: water,sugar,lemons,paper cups,and labor.Her costs per glass are as follows: $0.01 for water,$0.02 for sugar,$0.03 for lemons,$0.02 for cups,and $0.10 for the opportunity cost of her labor.She can sell 300 glasses for $0.50 each. -Refer to Scenario 13-4.What are Wanda's implicit costs per glass?

John owns a shoe-shine business.His accountant most likely includes which of the following costs on his financial statements?

Table 13-4 Gallo Cork Factory -Refer to Table 13-4.Each worker at Gallo's cork factory costs $12 per hour.The cost of each machine is $20 per day regardless of the number of corks produced.Assume the number of machines does not change.If Gallo's produces at a rate of 78 corks per hour,what is the total machine cost per day?

Which of the following expressions is correct?

When a firm's only variable input is labor,then the slope of the production function measures the

Lois is a self-employed pet sitter.She can make 20 "housecalls" per day.She is considering hiring her sister Dora to work for her.Dora can visit 18 houses per day.What would be the total output of Lois's firm if she hired her sister?

In the long run Firm A incurs total costs of $1,200 when output is 30 units and $1,650 when output is 40 units.Firm A exhibits

The average fixed cost curve

Figure 13-2 -Refer to Figure 13-2.With regard to cookie production,the figure implies

Which of the following statements about a production function is correct for a firm that uses labor to produce output?

Marginal cost increases as the quantity of output increases.This reflects the property of

If Franco's Pizza Parlor knows that the marginal cost of the 500^th pizza is $3.50 and that the average total cost of making 499 pizzas is $3.30,then

Total cost can be divided into two types of costs:

Variable cost divided by the change in quantity produced is

A student might describe information about the costs of production as

Dianne has decided to start her own photography studio.To purchase the necessary equipment,Dianne withdrew $10,000 from her savings account,which was earning 3% interest,and borrowed an additional $5,000 from the bank at an interest rate of 8%.What is Dianne's annual opportunity cost of the financial capital that has been invested in the business?

Table 13-13 Consider the following table of long-run total cost for four different firms: -Refer to Table 13-13.Which firm has diseconomies of scale over the entire range of output?

Table 13-2 -Refer to Table 13-2.The marginal product of the second worker is

When average total cost rises if a producer either increases or decreases production,then the firm is said to be operating at efficient scale.