Exam 6: Production and Costs

Assume the following cost information about Fred's widget company: Its fixed cost is $27, and its total variable cost is $18 for 1 unit; $33 for 2; $45 for 3; $60 for 4; and $78 for 5.Given this information:

Figure 7-H -Economists define the long run as any production time period lasting over one year.

An economist's measurement of profit differs from an accountant's in that:

Average variable cost:

If marginal cost is increasing then:

If the total cost of producing 10 units equals $90, and the average total cost of producing 11 units equals $8.75, then the marginal cost of the eleventh unit produced:

Figure 7-H -The law of diminishing marginal product provides an explanation for why average total cost eventually increases as output is expanded in the short run.

Table 6-E Quantity of Bicycles 0 1 2 3 4 5 6 (in thousands) Total Cost of Production \ 5 \ 8 \ 12 \ 16.5 \ 20 \ 27.5 \ 36 (in thousands) -Refer to Table 6-E.At what level of output (in thousands) is average total cost minimized?

Which of the following would be considered a variable input in the long run?

Which of the following is most likely a fixed cost?

Figure 7-H -When marginal cost is increasing, average total cost must be increasing.

Over the range of diminishing marginal product, if the variable input to a firm is increased:

An example of an implicit cost of production is:

Figure 6-D -Refer to Figure 6-D.At output level 0Q, total fixed cost equals:

As quantity increases, which of the following must be true if average total costs are rising?

Diseconomies of scale are associated with:

Figure 6-C -Refer to Figure 6-C.The short-run average total cost curve is the curve labeled:

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.The marginal cost of producing a third watch equals:

An important and often ignored opportunity cost is the:

Table 6-A \# of Pickers Total \# of Oranges Picked 1 1,000 2 2,000 3 3,000 4 3,900 5 4,700 6 5,400 7 6,000 8 6,200 9 6,000 -Refer to Table 6-A.The total product of labor diminishes with the addition of the ____ picker.