Exam 11: Output and Costs

Total cost is equal to the

-The first table above has the total product schedule for an imaginary good called a widget. Each unit of labor costs $25 and the total cost of capital is $100. a) Use this information to complete the remaining two tables. In the tables, TFC is the total fixed cost, TVC is the total variable cost, TC is the total cost, AFC is the average fixed cost, AVC is the average variable cost, ATC is the average total cost, and MC is the marginal cost. b) Suppose that labor becomes twice as expensive (so that one unit of labor now costs $50) but nothing else changes. Complete the above tables with the new cost schedules. If you plotted the cost curves, how would the increased wage rate affect the cost curves?

-The table above gives production information for Bob's Baseball Cap Company. Bob's total cost when zero caps are produced is $200 and workers cost $10 per hour. The average variable cost of producing 10 baseball hats per hour is

If diseconomies of scale are present and the firm ________ all its inputs, its output ________.

-The table above gives costs at Jan's Bike Shop. Unfortunately, Jan's record keeping has been spotty. Each worker is paid $100 a day. Labor costs are the only variable costs of production. What is the total variable cost of producing 60 bikes?

-Using the data in the above table, if the firm employs 3 workers, total product (measured in units per day) and average product and marginal product of the third worker (measured in units per worker) are

Decent Donuts -Based on the data in the table above, when Decent Donuts hires eight workers, the

At point e in the above figure, the marginal product of labor

Which of the following shifts the AVC curve upward at Barney's Bagel Bakery?

A period of time in which the quantity of all factors of production used by a firm can be varied is called the

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

Which of the following statements is true?

In a diagram with the total cost curve and the total variable cost curve, as output increases, the vertical distance between these two curves

Health care costs are expected to rise more than 10 percent into 2011, according to a survey of insurers by Aon Consulting Worldwide. Which of the following would be a variable cost in a hospital?

-Based on the above figure of the costs at Barney's Bagel Bakery, at which level of output will diminishing marginal returns first occur?

Based on the above figure, for which of the following amounts of output at Ike's Ice Cream Kitchen does the average product of labor exceed the marginal product of labor?

The firm's production function is the relationship between the ________ and ________.

The LRAC curve

Pizza Hut -Using the data in the above table, what is the marginal product of the third employee?

Decent Donuts -Based on the data in the table above, which worker at Decent Donuts has the highest marginal product?