Exam 6: Production and Costs

Assume Brad worked as a contractor for a year and had revenues of $120,000 and explicit cost of $70,000.If he could have been paid $80,000 working for a computer company, his accounting profit as a contractor was ____ and his economic profit was ____.

Which of the following cost curves is not generally U-shaped?

Constant returns to scale indicate that a firm is experiencing:

The marginal product of capital:

The average total cost of producing laptop computers in a factory is $500 at the current output level of 100 units per week.If fixed costs equal $10,000:

Figure 7-H -In the short run, some costs are fixed.

Figure 7-H -Ray Tucker has run his company, Tucker's Towing and Wrecking, for two years and has made an accounting profit of $34,000 each year.As long as Tucker's Towing continues to make accounting profits, it is rational to remain in the towing business.

In the short run, it is impossible for an expansion of output to cause an increase in:

Figure 7-H -In the long run, all costs are variable.

Figure 7-H -When marginal cost exceeds the average variable cost, average variable cost must be increasing.

A firm's average fixed cost when producing 2,000 units of output equals $10.When only 1,000 units of output are produced:

A firm is producing 200 units of output at a total cost of $1,000.The firm's average variable cost equals $4 per unit.Total fixed cost:

If AVC is subtracted from the ATC, the result is:

A firm replaces a machine by hiring 3 hourly production workers instead.

Don Keene promotes boxing matches.He makes $6,500 per fight.Which cost is most relevant to a decision as to whether to promote one more fight?

Which of the following is false?

Which of the following must be true if the short-run average total cost curve is declining?

If Oscar's company has a lease that runs until six months from now, which of the following would be true?

Economic profits are:

Table 6-D The table below shows how total cost varies with output in a factory producing watches: Output (Per Week) Tatal Cost (Dollars) 0 \ 50 1 \ 60 2 \ 65 3 \ 69 4 \ 72 5 \ 95 6 \ 120 -Refer to Table 6-D.If the output equals five watches per week, the average fixed cost and average variable cost of production equal ____ and ____, respectively.