Exam 8: Production and Cost

In the short run, at least one input is variable and one input is fixed.

When a total product curve is increasing at a decreasing rate, its corresponding marginal product curve is:

If a firm reduces the ratio of capital to labor, it becomes more:

If marginal product is greater than average product, then average product must be rising.

Use the following to answer question(s): Short-Run Costs -(Exhibit: Short-Run Costs) Curve B is the _______ cost curve.

Assume that the units of variable input in a coal-production process are 1, 2, 3, 4, and 5 and the corresponding total outputs (in tons) are 10, 19, 26, and 31, respectively.The marginal product of the third unit of input must be 7 tons.

Describe the relationships between marginal product and marginal cost and average product and average cost.