Exam 8: Short-Run Costs and Output Decisions

Refer to the information provided in Figure 8.3 below to answer the question(s) that follow. Figure 8.3 -Refer to Figure 8.3. The marginal cost of the 10th basketball is

The Farley Farm, a dairy company, has total costs of $15,000 and total variable costs of $2,000. The Farley Farm's total fixed costs are

Dana spends $10,000 on remodeling a storefront that she then opens as a shoe store. The business has not been very successful, and she needs an additional $3,000 to keep the shoe store open. Which of the following is true?

If P = MC and MC <ATC, then a perfectly competitive firm will earn ________ profits.

Because of free entry and exit, firms in a perfectly competitive market cannot earn a profit in the short run.

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. Micro Oven's average fixed costs of producing 10 units of output are

Which type of cost does depend on a firm's output?

Strawberries are produced in a perfectly competitive market. Average consumer incomes decrease. This will cause the individual strawberry farmer's marginal revenue to ________ and their profit-maximizing level of output to ________.

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. Assume that the relevant time period is the short run. Assuming the price of capital (K) is $10 per unit and the price of labor (L) is $5 per unit, this firm's total cost of producing one unit of output is

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 six microwave ovens are produced, Micro Oven's total costs are

Refer to the information provided in Table 8.3 below to answer the question(s) that follow. Table 8.3 -Refer to Table 8.3. If the firm is in a perfectly competitive industry with a market price of $30 per unit, the firm will produce ________ units and earn a profit of ________.

The formula for total fixed cost is

The Lawn Ranger, a landscaping company, has total costs of $7,000 and total fixed costs of $5,000. The Lawn Ranger's total variable costs are

Marginal cost is equal to ________ when ________ is minimized.

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. At the market price of $8 per bushel, if this farmer produces the profit-maximizing level of soybeans, the total revenue would be

ATC is

Refer to the information provided in Table 8.2 below to answer the question(s) that follow. Table 8.2 -Refer to Table 8.2. If Sherry produces five pairs of earrings, her total costs are

If the corn industry is perfectly competitive, ________ for corn is downward sloping and ________ is horizontal.

Average total cost is minimized at a higher level of output than average variable cost.

Total cost refers to