Exam 11: Technology, Production, and Costs

Table 11-2 Table 11-2 summarizes production at the Crunchy Apple Orchard for the month of April 2005. -Refer to Table 11-2. What is the marginal product of the 4th worker?

Average fixed cost is equal to

An isocost line shows

Which of the following is not a source of technological advancement for a producer?

If production displays constant returns to scale, then all economies of scale have been exhausted.

Which of the following statements is false?

The president of Toyota's Georgetown plant was quoted as saying, "Demand for high volumes saps your energy. Over a period of time, it eroded our focus [and] thinned out the expertise and knowledge we painstakingly built up over the years." Based on this quote, what must be true of the plant's average cost of production curve?

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

Which of the following is an example of market "production," as used by economist?

Figure 11-16 -Consider a firm that uses two inputs, labor and capital, to produce its output. Assume labor is measured on the horizontal axis and capital on the vertical axis. Which of the following best explains why the marginal rate of technical substitution decreases in absolute value as we move down an isoquant?

Explain how the listed events (a-d) would affect the following at Hilton Hotels. i. Marginal cost ii. Average variable cost iii. Average fixed cost iv. Average total cost a. Hilton decides on an across-the-board 5 percent increase in executive salaries. b. Hilton decides to eliminate all print advertising. c. Hilton signs a new contract with the Culinary Workers Union that requires the company to increase wages for all its kitchen workers. d. The federal government starts to levy a $5 room tax on all hotel rooms.

If a producer is not able to expand its plant capacity immediately, it is

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

As output increases, average fixed cost gets smaller and smaller.

On an isoquant/isocost graph, the least cost input combination of producing a given output is

Jill Johnson owns a pizzeria. She currently produces 10,000 pizzas per month at a total cost of $500. If she produced one more pizza her total cost rises to $500.11. What does this tell us about Jill's marginal cost of producing pizzas?

The division of labor and specialization explain

Figure 11-1 -Refer to Figure 11-1. The average product of the 4th worker

If a firm experiences diminishing returns its marginal product must be negative.

Figure 11-5 -Refer to Figure 11-5. Curve G approaches curve F because