Exam 8: Supply: the Costs of Doing Business

The figure given below shows three Short Run Average Total Cost (SRATC) curves and the Long Run Average Total Cost (LRATC) curve of a firm.Figure 8.3 -When more and more doses of fertilizers are added to a fixed plot of agricultural land, the crop yield initially declines but eventually rises.

The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 -Assume that one laborer produces 6 units of output, two laborers produce 14 units, three produce 20 units, and four produce 24 units. If the cost is $20 per unit of labor and fixed costs are $100, what is the average total cost of producing 14 units of output?

The figure given below shows three Short Run Average Total Cost (SRATC) curves and the Long Run Average Total Cost (LRATC) curve of a firm.Figure 8.3 -As long as there are fixed resources, diminishing marginal returns will never exist.

The following table shows the cost of producing different units of ball point pens by a firm.Table 8.1 -For a steel manufacturing firm, overhead costs would include:

The table below shows the total cost of producing different units of a commodity.Table 8.2 -According to Table 8.2, the average variable cost of producing two units of output is:

The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 -Assume that one laborer produces 6 units of output, two laborers produce 14 units, three laborers 22 units, four laborers 24 units, and five laborers 25 units. Diminishing returns set in when the firm hires:

The figure given below shows three Short Run Average Total Cost (SRATC) curves and the Long Run Average Total Cost (LRATC) curve of a firm.Figure 8.3 -In the electricity generation industry, the cost per kilowatt hour of electricity declines as the capacity to generate output increases. This situation represents:

The figure given below shows three Short Run Average Total Cost (SRATC) curves and the Long Run Average Total Cost (LRATC) curve of a firm.Figure 8.3 -When the marginal-cost curve lies above the average-total-cost curve, the average-total-cost curve slopes up and the average-variable-cost curve slopes down.

The table given below shows the average total cost of production of a firm at different levels of the output.Table 8.5 -The law of diminishing return does not apply to a firm in the long run because in this phase:

The table given below shows the total fixed and variable costs of a firm.Table 8.3 -Using the information in Table 8.3 we can conclude that the marginal cost curve intersects the average variable cost curve at ____ unit(s) of output.

The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 -A firm's marginal cost equals the:

The figure given below shows three Short Run Average Total Cost (SRATC) curves and the Long Run Average Total Cost (LRATC) curve of a firm.Figure 8.3 -Economies of scale exist when the long-run average-total-cost curve is positively sloped.

The figure given below shows three Short Run Average Total Cost (SRATC) curves and the Long Run Average Total Cost (LRATC) curve of a firm.Figure 8.3 -In the long run, if the output of a firm is zero then its total cost will be equal to its total fixed cost.

The table given below shows the average total cost of production of a firm at different levels of the output.Table 8.5 -If long-run costs are plotted on the vertical axis and the quantity of output is plotted on the horizontal axis, a line that is perfectly horizontal implies:

The figure given below shows three Short Run Average Total Cost (SRATC) curves and the Long Run Average Total Cost (LRATC) curve of a firm.Figure 8.3 -The phrase "to spread the overhead" refers to reducing the costs that are not directly attributable to the production process.

The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 -If an average cost curve is U-shaped, then:

The table below shows the total cost of producing different units of a commodity.Table 8.2 -Refer to Table 8.2. The average fixed cost of the first unit of output is:

The table given below shows the average total cost of production of a firm at different levels of the output.Table 8.5 -A positively sloped long run average cost implies:

The below figure shows the various combinations of the goods X and Y that yield different levels of utility.Figure 7.3 -Suppose that the total fixed cost of producing five sailboats is $4,000, total variable cost is $4,000, and the total cost of producing six sailboats is $10,000. The marginal cost of the sixth sailboat is:

The table given below shows the average total cost of production of a firm at different levels of the output.Table 8.5 -A firm gets less efficient as it gets bigger, if it is experiencing: