Exam 11: Behind the Supply Curve: Inputs and Costs

Use the following to answer question: -(Figure: A Firm's Cost Curves)Use Figure: A Firm's Cost Curves.The curve labeled W represents the firm's _____ cost curve.

Where the long-run average total cost curve is at its lowest point,it is tangent to the _____ of the corresponding short-run average total cost curve.

Decreasing and increasing returns to scale account for the shape of the:

In the long run:

(Figure: Long-Run and Short-Run Average Cost Curves)Use Figure: Long-Run and Short-Run Average Cost Curves.If a firm is producing at point C on the ATC₂ but anticipates increasing output to 225,000 units in the long run,the firm will build a _____ plant and have _____ of scale.

When a firm adds physical capital,its variable cost will decrease in the long run.

Use the following to answer question: -(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 1 mixer,her average fixed cost _____ in the range of output between 100 and 400 cakes.

If marginal cost is GREATER than average total cost,then average total cost is:

A business produces 10 pairs of eyeglasses.It incurs $30 in average variable cost and $5 in average fixed cost.The total cost of producing 10 pairs of eyeglasses is:

The _____ curve shows the additional cost of producing each additional unit of output.

In general,if marginal cost is EQUAL to average total cost:

If a firm has to increase output suddenly to meet an increase in demand,its average total cost will increase in the short run until it has time to add physical capital.

Average total cost is the ratio of _____ cost to _____.

Use the following to answer question: -(Table: Workers and Output)Use Table: Workers and Output.After graduation,you achieve your dream of opening an art shop that specializes in selling mud statues.You pay $10 per day on a loan from your uncle,regardless of how much you produce.You also pay $10 per day to each of the workers who you hire to make the mud statues.How many workers should you hire to minimize your marginal cost?

Economies and diseconomies of scale are associated with the:

A firm that is able to use its inputs more efficiently as it increases production in the long run BEST demonstrates:

The long-run average cost curve will be upward-sloping when the firm has:

Use the following to answer question: -(Figure: The Average Total Cost Curve)Use Figure: The Average Total Cost Curve.The total cost of producing three pairs of boots is approximately:

Use the following to answer question: -(Table: Cost Data)Use Table: Cost Data.The average fixed cost of producing 5 purses is:

Economies of scale are often the result of increased specialization,which can occur when output levels increase.