Exam 20: Cost Curves

The cost function C(y) = 100 + 3y2 has marginal cost less than average cost for all positive levels of output.

Mr. Dent Carr's total costs are 2s² + 40s + 40. If he repairs 10 cars, his average variable costs will be

A firm has the short-run total cost function c(y) = 4y2 +100. At what quantity of output is short-run average cost minimized?

The production function of a competitive firm is described by the equation y = The factor prices are p1 = $1 and p2 = $4 and the firm can hire as much of either factor it wants at these prices. The firm's marginal cost is

Mary Magnolia from your workbook has variable costs equal to , where y is the number of bouquets she sells per month and where F is the number of square feet of space in her shop. If Mary has signed a lease for a shop with 200 square feet, if she is not able to get out of the lease or to expand her store in the short run, and if the price of a bouquet is $6 per unit, how many bouquets per month should she sell in the short run?

The area under the marginal cost curve measures total fixed costs.

A competitive firm has the short-run cost function c(y)= 2y3 - 16y2 + 64y + 50. The firm will produce a positive amount in the short run if and only if the price is greater than

The marginal cost curve of a firm is MC = 8y. Total variable costs to produce 11 units of output are

A goatherd has the cost function c(y) = 4y2, where y is the number of tubs of goat cheese she makes per month. She faces a competitive market for goat cheese,with a price of $40 a tub. How many tubs should she produce per month?

Rex Carr could pay $10 for a shovel that lasts one year and pay $5 a car to his brother Scoop to bury the cars, or he could buy a low-quality car smasher that costs $200 a year to own and that smashes cars at a marginal cost of $1 per car. If it were also possible for Rex to buy a high-quality hydraulic car smasher that cost $650 per year to own and if with this smasher he could dispose of cars at a cost of $.67 per car, it would be worthwhile for him to buy this high-quality smasher if he needed to dispose of

Hildegard, an intelligent and charming Holstein cow,grazes in a very large, mostly barren pasture with a few patches of lush grass. When she finds a new grassy area, the amount of grass she gets from it is equal to the square root of the number of hours, h, that she spends grazing there. Finding a new patch of grass on which to graze takes her 1 hour. Since Hildegard does not have pockets, the currency in which her costs are measured is time. a. What is the total cost to Hildegard of finding a new plot of grass and getting y units of grass from it? b. Find an expression for her marginal costs and her average cost per patch of grass as a function of the amount of grass she gets from each patch. c. How much time would she spend in each plot if she wanted to maximize her food intake? (Hint: Minimize average costs per unit of grass eaten.)