Exam 8: Short-Run Costs and Output Decisions

Refer to the information provided in Figure 8.4 below to answer the question(s) that follow. Figure 8.4 -Refer to Figure 8.4. If three microwave ovens are produced, Micro Oven's total variable costs are

In the short run marginal cost is positive and increasing at output levels where total variable cost is ________ at a(n) ________ rate.

When marginal cost is between average variable cost and average total cost, marginal cost is increasing.

________ cost refers to the full economic costs of production.

Which statement is not true regarding the total variable cost curve?

Refer to the information provided in Table 8.4 below to answer the question(s) that follow. Table 8.4 -Refer to Table 8.4. Assuming the price of capital (K) is $10 per unit and the price of labor (L) is $5 per unit, the firm will use production technique ________ to produce ________ of output.

Jerry sells cherry sno-cones along the boardwalk in New Jersey. During the summer this is a perfectly competitive business, and Jerry faces a perfectly elastic demand curve. If he wants to try to increase revenues he should

A perfectly competitive firm will earn positive economic profits in the range of output for which the firm's price is ________ its minimum average total cost.

The increase in total cost that results from producing one more unit of output is the marginal cost.

The Framing Gallery frames posters and has total fixed costs of $1,000. The Framing Gallery is currently framing ________ posters if its average variable cost is $20 and its average total cost is $30.

Refer to the information provided in Table 8.4 below to answer the question(s) that follow. Table 8.4 -Refer to Table 8.4. Assuming the price of capital (K) is $10 per unit and the price of labor (L) is $5 per unit, the lowest long-run total cost of producing one unit of output is

Refer to the information provided in Table 8.5 below to answer the question(s) that follow. Table 8.5 -Refer to Table 8.5. If Phoebe produces three Swords, her total variable costs are

Refer to the information provided in Figure 8.4 below to answer the question(s) that follow. Figure 8.4 -Refer to Figure 8.4. The vertical distance AB represents

For a perfectly competitive firm, when P = MC = ATC the firm should reduce its output so as to increase its profits.

If an individual perfectly competitive firm charges a price ________ the industry equilibrium price while competitors charge the equilibrium price, the firm will not sell any of what it produces.

Refer to the information provided in Table 8.6 below to answer the question(s) that follow. Table 8.6 -Refer to Table 8.6. From the information in the given table,

As output decreases, in the short run

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow. Figure 8.8 -Refer to Figure 8.8. If this farmer produces the profit-maximizing level of soybeans when the market price is $8 per bushel, then her total cost would be

Total variable cost ________ as output increases, and total fixed cost ________ as output increases.

If the average variable cost curve is above the marginal cost curve, then