Exam 13: The Costs of Production

Scenario 13-5 Samantha has been working for a law firm and earning an annual salary of $80,000.She decides to open her own practice.Her annual expenses will include $15,000 for office rent,$3,000 for equipment rental,$1,000 for supplies,$1,200 for utilities,and a $35,000 salary for a secretary/bookkeeper.Samantha will cover her start-up expenses by cashing in a $20,000 certificate of deposit on which she was earning annual interest of $500. -Refer to Scenario 13-5.Samantha's annual economic costs will equal

When a firm experiences constant returns to scale,

Implicit costs are costs that do not require an outlay of money by the firm.

Suppose a certain firm is able to produce 165 units of output per day when 15 workers are hired.The firm is able to produce 176 units of output per day when 16 workers are hired (holding other inputs fixed).Then the marginal product of the 16th worker is

Table 13-3 -Refer to Table 13-3.What is total output when 5 workers are hired?

At Bert's Bootery,the total cost of producing twenty pairs of boots is $400.The marginal cost of producing the twenty-first pair of boots is $83.We can conclude that the

Jane decides to open her own business and earns $50,000 in accounting profit the first year.When deciding to open her own business,she turned down three separate job offers with annual salaries of $30,000,$40,000,and $45,000.What is Jane's economic profit from running her own business?

Table 13-3 -Refer to Table 13-3.What is total output when 2 workers are hired?

Figure 13-3 -Refer to Figure 13-3.The graph illustrates a typical

Figure 13-2 -Refer to Figure 13-2.As the number of workers increases,

Figure 13-9 The figure below depicts average total cost functions for a firm that produces automobiles. -Refer to Figure 13-9.In the long run,the firm can operate on which of the following average total cost curves?

Figure 13-7 -Refer to Figure 13-7.The efficient scale of production occurs at which quantity?

Table 13-9 Teacher's Helper is a small company that has a subcontract to produce instructional materials for disabled children in public school districts.The owner rents several small rooms in an office building in the suburbs for $600 a month and has leased computer equipment that costs $480 a month. -Refer to Table 13-9.How many instructional modules are produced when marginal cost is $1,300?

Economists in the field of industrial organization study how

The shape of the total cost curve is unrelated to the shape of the production function.

In the long run,

Industrial organization is the study of how

Consider the following information about bread production at Beth's Bakery: Beth pays all her workers the same wage,and labor is her only variable cost.From this information we can conclude that Beth's marginal cost

In some cases,specialization allows larger factories to produce goods at a lower average cost than smaller factories.

Table 13-9 Teacher's Helper is a small company that has a subcontract to produce instructional materials for disabled children in public school districts.The owner rents several small rooms in an office building in the suburbs for $600 a month and has leased computer equipment that costs $480 a month. -Refer to Table 13-9.What is the average fixed cost for the month if 9 instructional modules are produced?