Exam 11: Output and Costs

-The above table shows the total product schedule for the campus book store. If employees are paid $6 per hour and there are no other variable costs, then what is the marginal cost (MC) per book of increasing book sales from 83 to 87 books per hour?

The cost of a variable input, such as the wage paid to workers, decreases. This decrease shifts the

If average variable cost is decreasing as output increases, then marginal cost is definitely

-In the above figure, the long-run average cost curve exhibits diseconomies of scale

Which of the following statements regarding the marginal product curve is FALSE?

Total Product, Marginal Product, Average Product -In the above table, the marginal product of the third worker is

Total Product, Marginal Product, Average Product -In the above table, the average product is less than the marginal product

Diminishing marginal returns means that the firm definitely is experiencing

Diminishing marginal returns to labor occur because

The marginal product of labor is the increase in total product from a

In the long run,

An example of a short-run fixed factor of production is

-In the above figure, curve D slopes downward because

What is the difference between the short run and the long run?

-In the above figure, the total variable cost curve is curve

Which cost always increases as output increases?

The LRAC curve generally is

Which average cost curves are U-shaped?

-Cindy's Sweaters' production function is shown in the above table. Cindy rents two knitting machines for $30 a day each and hires workers at a wage rate of $40 a day. If Cindy produces 20 sweaters per day, what is her average fixed cost of production?

Explain why average total costs initially decrease and then increase as output increases.