Exam 10: Production and Cost

Ayanna grows herbs.Last year she grew 2,000 pounds of herbs in a year while using 250 square feet of land and 1 worker.This year she doubled her land to 500 square feet,doubled her workers to 2,and grew 4,500 pounds of herbs.She sells her rare,organic herbs for $50 a pound.She pays her a worker $25,000 a year and rents her land for $100 per square foot for a year.These are her only costs. a.What was Ayanna's total cost last year and this year? b.What was Ayanna's average total cost last year and this year? c.Did Ayanna experience economies or diseconomies of scale?

A cost incurred in the production of a good or service and for which the firm does not need to make a direct monetary payment,is referred to as ________ cost.

The figure above shows some of a firm's cost curves. -Based on the figure above,curve A is the firm's

Decreasing marginal returns occur in the short run as more labor is hired to work in a fixed sized plant because

Diseconomies of scale is

The relationship between the MP and MC curves is

-The above table shows the total product schedule for Hair Today,a hair styling salon. a.What is the first worker's marginal product? The second worker? The third worker? The fourth worker? The fifth worker? b.Over what range of workers is there increasing marginal returns? Over what range is there decreasing marginal returns?

Increasing marginal returns to labor

A firm's total revenue minus its total opportunity cost is called its

What resources can a firm change in the short run? In the long run?

Total fixed cost is the cost of

-The table above shows the total product schedule for The X Firm.The average product of labor is maximized at ________ workers because ________.

When plotted against the total output,what does the total fixed cost curve look like?

Lauren runs a chili restaurant in San Francisco.Her total revenue last year equaled $111,000.The rent on her restaurant totaled $48,000.Her labor costs totaled $43,000.Her materials,food and other variable costs totaled $19,000.To Lauren's accountant,Lauren

Moving along the total product curve,which of the following is held constant?

The long run is a time period that is

The short-run average total cost,average variable cost,and marginal cost curves are all U-shaped because of I.constant total fixed cost. Ii.increasing and then decreasing marginal returns as more labor is hired. Iii.economies and diseconomies of scale as the plant size increases.

To produce more output in the short run,a firm must employ more of

A firm's long-run average cost curve shows the ________ average cost at which it is possible to produce each output when the firm has had ________ time to change both its labor force and its plant.

Which of the following statements correctly describes a total product curve?