Exam 11: Output and Costs

In the long run, total fixed cost equals zero.

Marginal product is

In the long run, total variable cost is zero.

-The output at which average variable cost is a minimum is ________ than the output at which ________ is a minimum.

-Farmer Seth has a perfectly flat long-run average total cost curve over the range of output from 10,000 bushels of wheat to 100,000 bushels of wheat. Hence, over this range of output, Farmer Seth definitely experiences

The law of diminishing marginal returns says that as the firm uses more of ________, with a given quantity of ________, the ________ product of the variable input eventually diminishes.

The law of diminishing returns makes it clear that as more a variable input is employed, in the ________ the marginal product of the variable input eventually will ________.

-In the above figure, the relationship between costs indicates that the distance between curves

-The average total cost curves for Plant 1, ATC₀, and Plant 2, ATC₁, are shown in the figure above. The long-run average cost curve goes through points

Increasing marginal returns to labor might occur at low levels of labor input because of

When the marginal product equals the average product, the

Based on the above figure, at which level of output does diminishing marginal returns first occur at Ike's Ice Cream Kitchen?

When a firm is experiencing diseconomies of scale,

-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 18 sweaters per day, what is her total cost?

A firm's long-run average cost curve

The short run is a time frame in which

-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 total cost of producing 4 baseball hats per hour is

Electric utility companies have built larger and larger electric generating stations and, as a result, the long-run average cost of producing each kilowatt hour decreased. This is an example of

-The above table shows some cost data for Tracey's Tents. What is the average total cost when output is 3?

Minneapolis business Rogue Chocolatier sells specialty chocolate bars with a high cocoa content. Rogue can produce 15 chocolate bars per day with one employee, 29 with 2, 35 with 3 and 40 with 4 employees. Which statement is true?