Exam 11: Technology, production, and Costs

If a firm produces 20 units of output and incurs a total cost of $1,000 and a variable cost is $700,calculate the firm's average fixed cost of production if it expands output to 25 units.

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.

The long-run average cost curve shows

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

Two stores - Lazy Guys and Ralph's Recliners - are located in the same city.Both stores buy recliner chairs from the same manufacturer at the same price and both stores are about the same size,so that the fixed costs of production for both stores are the same.Ralph's Recliners sells more recliners per month and Ralph's has a lower average total cost of production.Which of the following can explain why the average total cost of production is lower for Ralph's Recliners?

Figure 11-13 -Refer to Figure 11-13.The lines shown in the diagram are isocost lines.Which of the following shows a decrease in the price of capital while the price of labor remains unchanged?

The typical shape of an isoquant is

A curve showing the lowest cost at which a firm is able to produce a given level of output in the long run is

When a firm experiences negative technological change it can produce the same output with fewer inputs.

When a firm produces more output using the same inputs or the same output using fewer inputs we say that the firm

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

The difference between technology and technological change is that

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?

In the short run,why does a production function eventually display diminishing returns to labor?

What is the difference between between total costs,variable costs,and fixed costs?

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

Describe the relationship between marginal cost and average total cost.

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

As a firm hires more labor in the short run,the

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