Exam 11: Technology, production, and Costs

Due to a downturn in business and increased competition,Dave Amundson,owner of Dave's Delicious Donuts,decides to close half of his 36 donut shops.Use a graph to illustrate average total cost curves for Dave's Delicious Donuts before and after closing the 18 stores.Assume that after closing the stores,Dave's Delicious Donuts will be producing at minimum average total cost.

The minimum efficient scale is

Suppose a chain of convenience stores reorganized its system of supplying its stores with food.This led to a sharp reduction in the number of trucks that the company had to use and increased the amount of fresh food on store shelves.Which of the following statements best describes the chain stores' actions?

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.What is Vipsana's total cost per day when she does not produce any gyros and does not hire any workers?

The slope of an isocost line determines the marginal rate of substitution.

If fixed costs do not change,then marginal cost

If average product is decreasing,then marginal product must be negative.

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

One reason why,in the short run,the marginal product of labor might increase initially as more workers are hired is that

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,

What is the difference between explicit costs and implicit costs? List three examples each of explicit costs and implicit costs that may be experienced by a small business.

Figure 11-9 -Refer to Figure 11-9.Suppose Hilda produces 100 gooseberry pies.What is the marginal rate of technical substitution of labor for capital when labor is increased from 10 to 20 hours?

If the total cost of producing 20 units of output is $1,000 and the average variable cost is $35,what is the firm's average fixed cost at that level of output?

Figure 11-7 -Refer to Figure 11-7.The lines shown in the diagram are isocost lines.Which of the following shows an increase in the firm's total cost while the price of labor and capital remain unchanged?

The ABC Company manufactures routers that are used to provide high-speed Internet service.ABC sells an average of 1,000 routers each month,but to exhaust economies of scale in its industry ABC would have to sell 3,000 routers each month.Therefore,

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.

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

Table 11-1 Table 11-1 shows the technology of production at the Matsuko's Mushroom Farm for the month of May 2011. -Refer to Table 11-1.Diminishing marginal returns sets in when the ________ worker is hired.

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

Describe how Wal-Mart has used positive technological change to manage its inventory.