Exam 8: Technology,production,and Costs

Suppose a chain of convenience stores reorganized its system of supplying its stores with food.This led to a sharp reduction in the number of trucks that the company had to use and increased the amount of fresh food on store shelves.Which of the following statements best describes the chain stores' actions?

Long-run cost curves are U-shaped because

Figure 8-5 -Refer to Figure 8-5.Suppose for the past 8 years the firm has been producing Qd units per period using plant size ATC4.Now,following a permanent change in demand,it plans to cut production to Qc units.What will happen to its average cost of production?

Which of the following would be categorized as an opportunity cost? a.not being able to spend your $10,000 savings if you sink the money in your business B.the cost of purchasing supplies for your house-cleaning business C.the cost of purchasing auto insurance for your dry-cleaning delivery business

Which of the following is the best example of a short run adjustment?

In 1955,the chairman of the Sony corporation offered to sell transistor radios through department stores in the United States.Sony based its selling price on its average total cost of production.If a store bought 5,000 radios,Sony would sell them at $29.95 each.For 10,000 there would be a discount,and for more than 10,000 the price would begin to climb.Based on this information,10,000 radios was located at the

Figure 8-4 -Refer to Figure 8-4.The vertical difference between curves F and G measures

Who was the economist who first analyzed the advantages of specialization and the division of labor?

Golda Rush quit her job as a manager for Home Depot to start her own hair dressing salon,Goldilocks.She gave up a salary of $40,000 per year,invested her savings of $30,000 (which was earning 5 percent interest)and borrowed $10,000 from a close friend,agreeing to pay 5 percent interest per year.In her first year,Golda spent $18,000 to rent a salon,hired a part-time assistant for $12,000 and incurred another $15,000 on equipment and hairdressing material.Based on this information,what is the amount of her explicit costs?

A characteristic of the long run is

Which of the following is an implicit cost of production?

Which of the following is a reason why a firm would experience diseconomies of scale?

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

A firm has successfully adopted a positive technological change when

Suppose you have just opened a store to sell espresso machines.Both you and a competing store buy this machine from a manufacturer for $130 each.Your competitor who has a store of the same size as yours is currently selling about 10 machines a month at a price of $200 per machine.You expect to sell about 6 machines a month at a price of $220 per machine.If you lower your price,you expect to make a loss.Which of the following could explain why your competitor is able to profitably sell the machine at a lower price although the cost of purchasing the machine is the same for the both of you?

If four workers can produce 18 chairs a day and five can produce 20 chairs a day,the marginal product of the fifth worker is

If the 15th unit of output has a marginal cost of $29.50 and the average cost of producing 14 units of output is $30.23,what will happen to the average cost of production if the 15th unit is produced?

Jayanthi moves her yoga studio from her home to a space she rents in Oakland,California.Holding everything else constant,as a result of this move,

As the level of output increases,what happens to the value of average fixed cost,and what happens to the difference between the value of average total cost and average variable cost?

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