Exam 7: Technology Production and Costs

Table 7.2 Table 7.2 summarises production at the Crunchy Apple Orchard for the month of April 2005. -Refer to Table 7.2.The marginal product of the 4^th worker is

The total output produced by a firm divided by the quantity of workers employed by the firm is the definition of

The short run is the time period during which a firm has at least one input constraint.

The typical shape of an isoquant is

What is the minimum efficient scale?

Figure 7.10 -Refer to Figure 7.10.Identify the minimum efficient scale of production.

The additional output a firm produces by hiring one more worker is called the marginal product of labour.

In the world oil market, oil is supplied up to the point where

A downward-sloping marginal product of labour curve demonstrates the law of diminishing marginal returns.

If, after hiring the 6th worker, a firm's output falls, then the marginal product of the 6th worker is negative.

An isocost line shows

In the short run, if average product is at its maximum, then average variable cost is at its minimum.

If the marginal cost curve is below the average variable cost curve, then

What is an isocost line? What is the slope of an isocost line? __________________________________________________________________________________________________________________________________________________________________________________________

Maria's Yiros House sells yiros.The cost of ingredients (pita, meat, spices, etc.)to make a yiros is $2.00.Maria pays her employees $60 per day.She also incurs a fixed cost of $120 per day.Calculate Maria's average fixed cost per day when she produces 50 yiros using two workers?

Table 7.3 -Refer to Table 7.3.The table above refers to the relationship between the quantity of workers employed and the number of cardboard boxes produced per day by Manny's House of Boxes.The capital used to produce the boxes is fixed.Diminishing returns to labour are first observed in this example after Manny hires the ________ worker.

An isoquant shows

If another worker adds 9 units of output to a group of workers who had an average product of 7 units, what is the average product of labour?

Table 7.7 Table 7.7 shows cost data for Lotus Lanterns, a producer of whimsical night lights. -Refer to Table 7.7.The average total cost of production when the firm produces 120 lanterns is

Explain whether each of the following is a fixed cost or a variable cost for Damian Dandridge's tattoo parlour. a.The payment he makes to buy tattoo ink. b.The wages he pays his employees. c.The $500-per-month payment he makes to advertise his shop on highway billboards. d.The lease payment he makes to the landlord who owns the building where his shop is located. e.The payment he makes on his liability insurance policy. __________________________________________________________________________________________________________________________________________________________________________________________