Exam 11: Technology,production,and Costs

Suppose the total cost of producing 40,000 flash drives is $120,000,and the fixed cost is $30,000. a.What is the variable cost? b.When output is 40,000,what are the average variable cost and the average fixed cost? c.Assuming the cost curves have the usual shape,is the dollar difference between the average total cost and the average variable cost greater when the output is 40,000 flash drives or when the output is 60,000 flash drives? Explain.

In his book The Wealth of Nations,Adam Smith employed the example of a pin factory in order to explain what economic concept?

Which of the following is an example of market "production," as used by economists?

Use the following graph to answer the following questions. a.If the wage rate and the rental price of machines are both $50 and total cost is $800,is the cost-minimizing point A,B,or C? b.If the wage rate is $40,the rental price of equipment is $120,and total cost is $1,200,is the cost-minimizing point A,B,or C? c.If the wage rate is $60,the rental price of equipment is $90,and total cost is $1,800,is the cost-minimizing point A,B,or C?

Average fixed cost can be calculated using any of the formulas below except

If a firm's long-run average total curve shows that it can produce 5,000 DVDs at an average cost of $2.00 and 15,000 DVDs at an average cost of $1.50,this is evidence of

When firms analyze the relationship between their level of production and their costs they separate the time period involved into

Use the general relationship between marginal and average values to explain why a marginal cost curve must intersect an average total cost curve and an average variable cost curve at their minimum points.

Firms in different countries that face different input prices may produce the same good using different combinations of inputs,even though they have access to the same technology.

As output increases,the distance between average total cost and average variable cost increases.

Number of Workers Apples per Day (bushels) 1 50 2 120 3 180 4 230 5 270 6 300 Table 11-2 summarizes production at the Crunchy Apple Orchard for the month of April. -Refer to Table 11-2.What is the marginal product of the 4th worker?

Which of the following is an example of a long-run adjustment?

Figure 11-18 -Refer to Figure 11-18.Starting from point D,a movement along isoquant2 to point F

State the law of diminishing marginal returns.

Diseconomies of scale occur when

In the long run the relevant cost is total cost.

On an isoquant/isocost graph,the least cost input combination of producing a given output is

A firm has successfully adopted a positive technological change when

Figure 11-13 -Refer to Figure 11-13.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?

Figure 11-7 shows the cost structure for a firm. -Refer to Figure 11-7.When the output level is 100 units average fixed cost is