Exam 8: Technology,production,and Costs

Explain how the listed events (a-d)would affect the following at Hilton Hotels. i.Marginal cost ii.Average variable cost iii.Average fixed cost iv.Average total cost a.Hilton decides on an across-the-board 5 percent increase in executive salaries. b.Hilton decides to eliminate all print advertising. c.Hilton signs a new contract with the Culinary Workers Union that requires the company to increase wages for all its kitchen workers. d.The federal government starts to levy a $5 room tax on all hotel rooms.

What is the difference between explicit costs and implicit costs? List three examples each of explicit costs and implicit costs that may be experienced by a small business.

In the long run the relevant cost is total cost.

Vipsana's Gyros House sells gyros.The cost of ingredients (pita,meat,spices,etc. )to make a gyro is $2.00.Vipsana pays her employees $60 per day.She also incurs a fixed cost of $120 per day.Calculate Vipsana's total cost per day when she produces 50 gyros using two workers?

Table 8-1 Table 8-1 shows the technology of production at the Matsuko's Mushroom Farm for the month of May 2011. -Refer to Table 8-1.What is the average product of labor when the farm hires 5 workers?

Suppose Argyle Sachs has to choose between building a smaller sweater factory and a larger sweater factory.In the following graph,the relationship between costs and output for the smaller factory is represented by the curve ATC₁,and the relationship between costs and output for the larger factory is represented by the curve ATC₂. a.If Argyle expects to produce 3,600 sweaters per month,should he build a smaller factory or a larger factory? Briefly explain? b.If Argyle expects to produce 5,000 sweaters per month,should he build a smaller factory or a larger factory? Briefly explain. c.If the average cost of producing sweaters is lower in the larger factory when Argyle produces 6,500 sweaters per week,why isn't it also lower when Argyle produces 4,000 sweaters per week?

Figure 8-4 -Refer to Figure 8-4.Curve G approaches curve F because

Figure 8-1 -Refer to Figure 8-1.Diminishing marginal productivity sets in after

Figure 8-1 -Refer to Figure 8-1.The marginal product of the 3rd worker is

Table 8-2 -Refer to Table 8-2.Alicia Gregory owns a foot massage business.She leases 4 computer-controlled massage booths,for which she pays $125 per day.She cannot increase the number machines she leases without giving the manufacturer 3 months' notice.She can hire as many workers as she wants at a cost of $75 per day per worker.These are the only two inputs she uses in her business.Use this information to fill in the columns in the above table.

Table 8-3 Table 8-3 shows cost data for Lotus Lanterns,a producer of whimsical night lights. -Refer to Table 8-3.What is the average variable cost per unit of production when the firm produces 90 lanterns?

Figure 8-4 -Refer to Figure 8-4.Identify the curves in the diagram.

The minimum efficient scale is

If the long-run average total cost curve is downward-sloping,then the firm is experiencing decreasing returns to scale.

Which of the following is a factor of production that generally is fixed in the short run?

Red Stone Creamery currently hires 5 workers.When it added a 6th worker,its output actually fell.Which of the following statements is true?

Table 8-3 Table 8-3 shows cost data for Lotus Lanterns,a producer of whimsical night lights. -Refer to Table 8-3.What is the marginal cost per unit of production when the firm produces 100 lanterns?

The difference between technology and technological change is that

The marginal product of labor is defined as

Improvements in inventory control represent a positive technological change because they allow firms to produce the same output with fewer inputs.In recent years,many firms have adopted an inventory system in which firms accept shipments from suppliers as close as possible to the time they will be needed.Wal-Mart has been a pioneer in using inventory control systems to this in its stores.This type of inventory system is called a ________ inventory system.