Exam 11: Output and Costs

Angel Rodriguez pulls up in his 24-foot panel truck in front of Sezz Medi Brick Oven Pizza in Upper Manhattan. Even though it's the middle of the summer, he's delivering- firewood. He says even though fuel costs have doubled in the past year, it's still worth the premium he gets delivering ash and cherry to the captive and growing market in NYC. Which of the following statements is true about short run costs for Angel?

A firm's total variable cost (TVC) is defined as a cost that

When the average product of labor is greater than the marginal product of labor,

-The table above gives a firm's total product schedule. Suppose labor is the only variable factor of production. The price of labor is $500 per week and total fixed costs are $600 per week. If 95 units are produced, the average total cost is

The marginal cost curve intersects the average fixed, average variable, and average total cost curves all at their minimum points.

Economies of scale occur when the percentage increase in output

The marginal product of labor is the

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

-Using the data in the above table, when the firm increases its output from 4 to 9 units, the marginal cost of a unit is

-Silvio's Pizza is a small pizzeria. The firm's production function is shown in the table above. Suppose that Silvio's costs include only the cost of renting ovens, which is $100 per oven per week, the labor cost, $280 per worker per week, and the opportunity cost of Silvio's entrepreneurship, $1,000 per week. Suppose Silvio's kitchen currently has enough room for only one oven. If Silvio employs 3 workers, producing 200 pizzas per week is ________ in the short run and ________ in the long run.

If the ATC curve has a positive slope, then the MC curve must be

-The above figure shows the costs at Barney's Bagel Bakery. For which of the following levels of output does the average product of labor exceed the marginal product of labor?

Describe the relationship between the marginal and average products of labor as the employment of labor increases in the short run.

The marginal product and average product curves

-Silvio's Pizza is a small pizzeria. The firm's production function is shown in the table above. Suppose that Silvio's costs include only the cost of renting ovens, which is $100 per oven per week, the labor cost, $280 per worker per week, and the opportunity cost of Silvio's entrepreneurship, $1,000 per week. Suppose Silvio's uses Plant 2. The firm's average total cost is minimized when ________ pizzas per week are produced.

The long run is a period of time in which

All the decisions made by people who operate firms have one overriding objective, which is to ________.

"If the marginal product of labor curve slopes downward, then the average product of labor curve necessarily must slope downward." Explain whether the previous statement is correct or incorrect?

As output increases, AVC approaches ATC because of

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