Exam 11: Technology, Production, and Costs

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.

Table 11-8 Elegant Settings manufactures stainless steel cutlery. Table 11-8 shows the company's cost data. -Refer to Table 11-8. Elegant Settings experiences

Which of the following statements best describes the economic short run?

What is an isoquant? What is the slope of an isoquant?

If, when a firm doubles all its inputs, its average cost of production increases, then production displays

Increases in the marginal product of labor result from

Which of the following would be categorized as an opportunity cost? a. not being able to spend your $10,000 savings if you sink the money in your business B. the cost of purchasing supplies for your house-cleaning business C. the cost of purchasing auto insurance for your dry-cleaning delivery business

The law of diminishing marginal returns

Figure 11-13 -Refer to Figure 11-13. The lines shown in the diagram are isocost lines. Which of the following shows a decrease in the price of capital while the price of labor remains unchanged?

Figure 11-2 -Refer to Figure 11-2. Short-run output is maximized at

The change in a firm's total cost from producing one more unit of a good or service is the firm's

If production displays diseconomies of scale, the long-run average cost curve is

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

Figure 11-7 Figure 11-7 shows the cost structure for a firm. -Refer to Figure 11-7. When output level is 100, what is the total cost of production?

If a firm experiences positive technological change, it is able to produce more output using the same inputs.

Figure 11-11 Figure 11-11 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 11-11. Constant returns to scale

If, when a firm doubles all its inputs, its average cost of production decreases, then production displays

If the long-run average total cost curve is downward sloping, then the firm is experiencing decreasing returns to scale.

The process a firm uses to turn inputs into outputs of goods and services is called technology.

Figure 11-6 Figure 11-6 contains information about the short-run cost structure of a firm. -Refer to Figure 11-6. In the figure above, which letter represents the average total cost curve?