Exam 11: Technology, production, and Costs

The rules of accounting generally require that ________ costs be used for purposes of keeping a company's financial records and for paying taxes.These costs are sometimes called ________ costs.

Figure 11-6 Figure 11-6 illustrates the long-run average cost curve for a firm that produces picture frames.The graph also includes short-run average cost curves for three firm sizes: ATCa,ATCb and ATCc. -Refer to Figure 11-6.The minimum efficient scale of output is reached at what rate of output?

If a firm is experiencing diseconomies of scale,its long-run average cost curve is increasing.

Use the general relationship between marginal and average values to explain why a marginal cost curve must intersect an average total cost curve and an average variable cost curve at their minimum points.

Figure 11-4 -Refer to Figure 11-4 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.

Sam Lewis owns a firm in New York City's garment district.If Sam keeps adding workers to use the same number of sewing machines,eventually the workplace will become so crowded that workers will get in each other's way.At this point

The typical shape of an isoquant is

Table 11-2 -Refer to Table 11-2.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.The highest value of the average product is labor is ________ when Manny hires ________ workers.

Figure 11-7 -Refer to Figure 11-7.The figure above illustrates a series of isoquants.Which of the following statements is true?

The financial success of the movies The Lion King and Toy Story led to

Which of the following statements is true?

Diminishing marginal product of labor occurs when adding another unit of labor

Which of the following are examples of a firm experiencing a positive technological change? a.A firm is able to reduce its inputs by 15 percent and still produce the same level of output. b.A seminar attended by the firm's workers makes them more productive. c.A firm adds 5 percent to its workforce and is able to maintain its initial level of output. d.A firm restructures its distribution system and is able to save on its shipping times. e.A firm rearranges its warehouse and finds that it can use fewer workers to maintain its productivity level.

Which of the following statements is true?

An avocado orchard employs five full-time workers.Currently,the average product of labor is 120 pounds of avocados per day.The orchard hires a 6th full-time worker and his marginal product is 150 pounds of avocados.The average product of the six workers will now be

The law of diminishing marginal returns

A U-shaped long run average cost curve implies that a firm experiences economies of scale at low levels of production and diseconomies of scale at high levels of production.

Akio Morita,chairman of Sony,used a curve to determine the price of radios his company sold.This curve was

The River Rouge plant was built by the Ford Motor Company in the 1920s to produce the company's Model A car.Which of the following is evidence that the River Rouge plant suffered from diseconomies of scale?

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