Exam 11: Technology, Production, and Costs

Figure 11-16 -A change in the slope of an isocost line is due to a change in

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. For output rates greater than 20,000 picture frames per month,

Figure 11-1 -Refer to Figure 11-1. Diminishing marginal productivity sets in after

Gertrude Stork's Chocolate Shoppe normally employs 4 workers. When the Chocolate Shoppe hired a 5th worker the Shoppe's total output decreased. Therefore,

You own a business that answers telephone calls for physicians after their offices close. You have an incentive to substitute capital for labor if the

Suppose the price of capital and labor remain constant. As a firm's expenditures for capital and labor increase, its isocost line

What is an isocost line? What is the slope of an isocost line?

If another worker adds 9 units of output to a group of workers who had an average product of 7 units, then the average product of labor

What is minimum efficient scale? What is likely to happen in the long run to firms that do not reach minimum efficient scale?

Figure 11-10 -Which of the following statements regarding a firm's long-run average total cost (LRATC) curve and its short-run average total cost (SRATC) curve is true?

The Santa Fe Spark Plug Company supplies spark plugs to automotive parts dealers. An increase in the demand for its product led Santa Fe to hire 150 new workers. Santa Fe also plans to expand the capacity of its plant but this project will take 2 years to complete. Which of the following statements is true?

Table 11-7 Table 11-7 shows cost data for Lotus Lanterns, a producer of whimsical night lights. -Refer to Table 11-7. What is the variable cost of production when the firm produces 115 lanterns?

Table 11-5 -Refer to Table 11-5. Suzette's Fancy Packaging subcontracts with Sunshineland Pecans to box dried fruit and nuts for Suzette's mail order business. Suzette rents space for her factory for $400 a week in a nearby strip mall. She can hire temporary workers for $200 a week. Table 11-5 above shows her output and cost data. Use the table to answer questions a-e. a. Complete the table. b. In the last week of summer Suzette closes her business to go on a family vacation. What are her costs during that week? c. In one week Suzette exactly breaks even. If her revenue for the week is $1,200, how many boxes of fruit and nuts did she produce? d. Judging from the marginal product of labor data, would you say that Suzette had to settle for increasingly unproductive workers? Explain your answer. e. Suzette has received an order for 1,500 boxes of nuts per week for the next 3 months. If she expects the trend in the marginal product of labor will continue in the same direction, what do you think she should do? Should she not commit until she can move to a larger space or should she just hire more workers? Explain your answer.

Academic book publishers hire editors, designers, and production and marketing managers who help prepare books for publication. Because these employees work on several books simultaneously, the number of people the company hires will not go up and down with the quantity of books the company publishes during any particular year. The salaries and benefits of people in these job categories will be included in

Which of the following is an example of positive technological change?

Average fixed cost can be calculated using any of the formulas below except

Which of the following is typically considered a fixed cost by academic book publishers but a variable cost by companies that print books?

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. If the firm chooses to produce and sell 25,000 frames per month by operating in the short run with a scale operation represented by ATCc,

Figure 11-2 -Refer to Figure 11-2. The curve labeled "F" is

The slope of an isoquant is equal to the ratio of the price of the input on the horizontal axis divided by the price of the input on the vertical axis, multiplied by -1.