Exam 11: Output and Costs

-The above table shows the total product schedule for the campus book store. If each employee is paid $6 per hour, what is the average variable cost of selling 83 books per hour (assuming labor costs are the only variable costs of production)?

-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 1 and hires 2 workers. What is the firm's average variable cost?

What factors of production can a firm change in the short run? In the long run?

-In the above table, between what two levels of output does one first observe the law of diminishing returns?

-Which of the following curves is not U-shaped?

As illustrated in the above figure, after 60 gallons are produced each hour at Ike's Ice Cream Kitchen, the ATC curve starts to slope upward. The ATC starts to slope upward because the

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. How would an increase in Angel's salary affect short run costs?

How do we calculate average fixed cost and why does average fixed cost fall as output increases?

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

Over the range of output for which the average product of labor curve is negatively sloped, the average variable cost curve is positively sloped.

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

A technological change that increases productivity ________ marginal product and ________ marginal cost.

-In the above figure, after the second worker is hired, the marginal product of labor is

Decent Donuts -Use the data in the table above and suppose that labor is the only variable factor of production. If each worker is paid $42.00 per day, what is the average variable cost to Decent Donuts of producing 122 dozen donuts per day?

A firm's average total cost is $80, its average variable cost is $75, and its output is 50 units. Its total fixed cost is

-Dustin's copy shop can use four alternative plants. The figure above shows the average total cost curves for Plant 1 (ATC₁), Plant 2 (ATC₂), Plant 3 (ATC₃), and Plant 4 (ATC₄). Dustin's Plant 2 will be economically efficient if the firm produces

Jefferson's Cleaners -Using the data in the above table, which worker at Jefferson's Cleaners has the highest marginal product?

-In the above table, what is average product when 4 workers are employed?

Total Product, Marginal Product, Average Product -In the above table, the marginal product is greatest when the

A firm's marginal cost is the increase in its total cost divided by the increase in its