Exam 7: The Production Process: the Behavior of Profit-Maximizing Firms

Refer to Scenario 7.7 below to answer the question(s) that follow. SCENARIO 7.7: A lawn service company has the following production possibilities. With one, two, three, and four workers, the company can mow 4, 9, 12, and 14 lawns per day, respectively. -Refer to Scenario 7.7. The marginal product of the fourth worker is

Refer to the information provided in Figure 7.8 below to answer the question(s) that follow. Figure 7.8 -Refer to Figure 7.8. If the price of capital is $40, then along isocost line AB total cost is

Refer to the information provided in Figure 7.1 below to answer the following question(s). Figure 7.1 -Refer to Figure 7.1. A corn producer produces 80 bushels of corn and sells each bushel at $5. The cost of producing each unit bushel is $2. This corn producer's total revenue is ________ and profit if ________.

At the Larson Bakery the marginal products of the first, second, and third sales clerks are 30, 27, and 21 customers served, respectively. The total product (number of customers served) of the first two sales clerks is

Refer to the information provided in Figure 7.11 below to answer the question(s) that follow. Figure 7.11 -Refer to Figure 7.11. If the firm's cost of capital is $15 per unit and its cost of labor is $30 per unit, the isocost line represents a total cost of

A firm's isocost line shifts parallel outward from the original isocost line as its

A firm is operating such that the marginal product of labor is 48 and the marginal product of capital is 12. The firm is minimizing its costs only if

At the Pampered Pet Salon the marginal products of the first, second, and third workers are 20, 16, and 10 dogs washed, respectively. The total product (number of dogs washed) of the first two workers is

At each point of tangency for isoquants and isocost lines, the slope of the isoquant must be ________ the slope of the isocost line.

Refer to the information provided in Figure 7.3 below to answer the question(s) that follow. Figure 7.3 -Refer to Figure 7.3. The average product with two workers is ________ yards raked.

When Burning Bob's Salsa House hires one worker, 30 customers can be served in an hour. When Burning Bob's Salsa House hires two workers, 50 customers can be served in an hour. The marginal product of the second worker is ________ customers served per hour.

The Wax Works sells 400 candles at a price of $6 per candle. The Wax Works' total costs for producing 400 candles are $2,500. The Wax Works' economic profit is

The Sweet Success Bakery sells 500 cakes at a price of $10 per cake. Its total economic costs for producing 500 cakes are $500. The Sweet Success Bakery's economic profits are

To minimize costs, a firm should use more capital and less labor if the product derived from the last dollar spent on labor is ________ the product derived from the last dollar spent on capital.

Refer to the information provided in Figure 7.10 below to answer the question(s) that follow. Figure 7.10 -Refer to Figure 7.10. At Point C, the slope of q² = 200 is

If diminishing marginal returns have already set in for The Picture Perfect Framing Store and the marginal product of the fifth picture framer is 20, then the marginal product of the sixth picture framer must be

Refer to the information provided in Figure 7.10 below to answer the question(s) that follow. Figure 7.10 -Refer to Figure 7.10. If this firm's cost of capital is $10 per unit and its cost of labor is $5 per unit, the isocost line represents a total cost of

You own a building that has four possible uses: a tailor shop, a pharmacy, a sports bar, and an antique mall. The building's value in each use is $4,000; $6,000; $8,000; and $10,000, respectively. You decide to open a sports bar. The opportunity cost of using this building for a sports bar is

Related to the Economics in Practice on page 151: You own a truck and use it to deliver merchandise to retailers and hire a driver to make such deliveries. The speed at which you instruct the driver to drive depends on

Refer to the information provided in Figure 7.11 below to answer the question(s) that follow. Figure 7.11 -Refer to Figure 7.11. If the isocost line represents a total cost of $7,200, the firm's cost of capital is ________ per unit and its cost of labor is ________ per unit.