Exam 11: Technology, Production, and Costs

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. The minimum efficient scale of output is reached at what rate of output?

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

Figure 11-13 -Refer to Figure 11-13. The lines shown in the diagram are isocost lines. If the price of labor is $50 per unit, what is the price of capital along the isocost CE?

If marginal product is equal to average product, then total product is at a maximum.

Figure 11-10 -If a firm's long-run average total curve shows that it can produce 5,000 DVDs at an average cost of $2.00 and 15,000 DVDs at an average cost of $1.50 this is evidence of

Figure 11-2 -Refer to Figure 11-2. The average product of labor declines after L2 because

In the short run, marginal product of labor increases at first and then falls because

Jayanthi moves her yoga studio from her home to a space she rents in Oakland, California. Holding everything else constant, as a result of this move,

Fill in the missing values in the following table. Draw one graph showing how total output increases with the quantity of workers hired, and another graph showing the marginal product of labor and the average product of labor.

If four workers can produce 18 chairs a day and five can produce 20 chairs a day, the marginal product of the fifth worker is

If the marginal product of labor is decreasing, then marginal cost of production must be rising.

Stan owns a software design business. He does not have time to expand his office space or redesign the layout of his office. He can increase the amount of work he does by working more hours, asking his current employees to work more hours, or hiring more employees. The relationship between Stan's inputs and the maximum output his firm can produce is called his

A curve that shows all the combinations of two inputs, such as labor and capital, that will produce the same level of output is called

Suppose a firm uses labor and capital to produce output. The last unit of labor hired has a marginal product of 12 units of output, and the last unit of capital employed has a marginal product of 20 units. Use the optimal combination of inputs rule to calculate the price of capital if the price of labor is $6 per unit. The price of capital is

The difference between technology and technological change is that

Red Stone Creamery currently hires 5 workers. When it added a 6th worker, its output actually fell. Which of the following statements is true?

The long run refers to a time period

Figure 11-9 -Refer to Figure 11-9 above to solve the following problems. a. Calculate the fixed cost of production. b. Calculate the average total cost of production when the firm produces 20 units of output. c. Calculate the average variable cost of production when the firm produces 20 units of output. d. Calculate the average fixed cost of production when the firm produces 20 units of output. e. Calculate the average fixed cost of production when the firm produces 15 units of output. f. If the firm increases output from 15 to 20 units what is the marginal cost of output?

Describe the relationship between marginal cost and average total cost.

Average fixed costs of production