Exam 11: Technology, production, and Costs

Figure 11-7 -Refer to Figure 11-7.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 average total cost is $50 and average fixed cost is $15 when output is 20 units,then the firm's total variable cost at that level of output is

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

If the average variable cost curve is above the marginal cost curve,then

Is it possible for average total cost to be decreasing over a range of output where marginal cost is increasing? Briefly explain.

Economies of scale exist as a firm increases its size in the long run because of all of the following except

Which of the following are implicit costs for a typical firm?

Table 11-3 Table 11-3 shows cost data for Lotus Lanterns, a producer of whimsical night lights. -Refer to Table 11-3.What is the variable cost of production when the firm produces 115 lanterns?

Figure 11-6 -Refer to Figure 11-6.Which of the following statements about the input combinations shown in the diagram is false?

Golda Rush quit her job as a manager for Home Depot to start her own hair dressing salon,Goldilocks.She gave up a salary of $40,000 per year,invested her savings of $30,000 (which was earning 5 percent interest)and borrowed $10,000 from a close friend,agreeing to pay 5 percent interest per year.In her first year,Golda spent $18,000 to rent a salon,hired a part-time assistant for $12,000 and incurred another $15,000 on equipment and hairdressing material.Based on this information,what is the amount of her implicit costs?

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

Figure 11-9 -Refer to Figure 11-9.What is the combination of inputs that produces 200 gooseberry pies at the lowest cost?

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

If the 15th unit of output has a marginal cost of $29.50 and the average cost of producing 14 units of output is $30.23,what will happen to the average cost of production if the 15th unit is produced?

If,after hiring the 6th worker,a firm's output falls,then the marginal product of the 6th worker is negative.

Figure 11-6 -Refer to Figure 11-6.The movement from isoquant T to isoquant U depicts

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 A) a only B) a and c only C) b and c only D) all of the above

Economic costs of production differ from accounting costs in that

The absolute value of the slope of an isocost line equals the ratio of

The marginal product of labor is defined as