Exam 6: Technology,production and Costs

Stan owns a software design business.He obtained a bank loan to buy computer equipment for his business.He pays $1 000 per month for interest on the loan.He has 10 employees,each of whom is paid $4 000 per month.Because his business has been successful,next month he will increase employee wages to $5 000.If the revenue from his business remains at its current level,Stan is considering an addition to his office.Which of the following statements regarding Stan's business is false?

Which of the following statements is false?

If 11 workers can produce a total of 54 units of a product and a 12th worker has a marginal product of 6 units,then the average product of 12 workers is ________.

All of the following cost curves are U shaped except one.Which curve is not U shaped?

Figure 6.8 -Refer to Figure 6.8 above to answer the following questions. a.Identify the curves in the diagram. A ________ B ________ C ________ b.What is the numerical value of fixed cost when the quantity of output = 10? c.What is the numerical value of variable cost when the quantity of output = 10? d.What is the numerical value of total cost when the quantity of output = 10? e.What is the numerical value of average fixed cost when the quantity of output = 10? f.What is the numerical value of average total cost when the quantity of output = 10? g.On the graph identify the area that represents the total variable cost of production when the quantity of output = 10. h.On the graph identify the area that represents the fixed cost of production when the quantity of output = 10. __________________________________________________________________________________________________________________________________________________________________________________________

The correct formula for the marginal product of labour is ________.

Which of the following is the implicit cost for a typical firm?

The definition for the marginal product of labour is ________.

Which of the following is not a reason why firms experience economies of scale?

State the law of diminishing marginal returns. __________________________________________________________________________________________________________________________________________________________________________________________

Figure 6.6 Figure 6.6 contains information about the short-run cost structure of a firm. -Refer to Figure 6.6.In the figure above,which letter represents the average total cost curve?

A characteristic of the long run that is not available in the short run is that a firm is free to vary its output.

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

Figure 6.2 -Refer to Figure 6.2.At what point is short run output maximised?

The shape of the average total cost curve is determined by the shape of _________.

Economic costs include implicit costs but not explicit costs.

One reason why,in the short run,the marginal product of labour might increase initially as more workers are hired is that _________.

If the 15th unit of output has a marginal cost of $29.50 and the average cost of producing 14 units of output is $30.23,what will happen to the average cost of production if the 15th unit is produced?

In the long run,the relevant cost is total cost.

A curve showing the lowest cost at which a firm is able to produce a given level of output in the long run is _________.