Exam 14: Production and Cost

Jessica is a young doctor who has just started her own practice.Her previous position paid her $80,000 a year.For office space,she uses a building which she owns and which she has rented in the past for $40,000 a year.Her total revenue from her new practice is $250,000.She pays $50,000 to other firms for materials and supplies,and she pays $40,000 in wages to her office nurse.Assume that Jessica's building and equipment do not depreciate and that her normal profit is $20,000. a.Which of Jessica's costs are explicit costs and what is their total? b.Which of Jessica's costs are implicit costs and what is their total? c.What is the opportunity cost of all factors of production employed by Jessica? d.What is Jessica's economic profit?

Which of the following curves are U-shaped? i.average variable cost curve ii.average fixed cost curve iii.average total cost curve A) i and ii B) i and iii C) ii and iii D) i, ii, and iii E) only ii

Jay set up his hot dog stand near the business district.His total variable cost includes the

This month,the local widget factory produced 100 widgets.The total variable cost of production was $500 and the average total cost of production was $8. a.What is the total cost? b.What is the total fixed cost? c.What is the average fixed cost? d.What is the average variable cost?

Professor Rush decided to quit teaching economics and opens a shoe store out at the mall.He gave up an annual income of $50,000 to open the store.A year after opening the shoe store,the total revenue for the year was $200,000.Rush's expenses were $30,000 for labor,rent was $18,000,and utilities were $1,200.He also had to purchase new shoes from manufacturers,at a cost of $60,000,which was financed by cashing in his savings of $60,000 that had been in a bank earning 8 percent per year.The normal profit from operating a shoe store in the mall is $20,000.Determine Professor Rush's explicit costs,implicit costs,and economic profit.

-The table above shows a total product schedule.Suppose that labor costs $20 per worker and fixed costs are $60.The average variable cost of producing 80 units equals ________ per unit.

A firm's fundamental goal is

The long-run average cost curve

When the long-run average cost curve is downward sloping,

The long run is a time period in which

-The table above shows the total product schedule for Rick's Lawn Service,a yard care company.The total product schedule shows

Diseconomies of scale can occur as a result of which of the following?

Scott owns a law-enforcement training operation in Boise,Idaho.He employs three trainers.The last trainer Scott hired increased Scott's total cost by $466 per week even though the trainer brought in only one new client.Hence Scott's

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

Which of the following variables do you need to know to calculate marginal cost? i.change in total cost ii.marginal product of labor iii.change in quantity of labor used iv.change in output

Denise owns a plant that produces watch parts in Ohio.Denise noticed that when she hired the last worker,that worker's marginal product exceeded the marginal product of the previous worker.As a result,when the last worker was hired,Denise's average product of labor

An increase in the price of labor (a variable resource)shifts

The figure above shows some of a firm's cost curves. -A firm's rent is a fixed cost.If the rent increases,then in the figure above ________ upward.

Marginal product equals

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