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

You own a business that distributes restaurant menus to houses and apartments. You have an incentive to substitute labor for capital if the

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's profit is $200 and is producing 100 bushels of corn. Then he must have a cost per bushel of ________.

A graph showing ________ is an isoquant.

Refer to the information provided in the table below to answer the following question. Table 7.3 -Refer to Table 7.3. Suppose output varies, ceteris paribus, with labor input in the following manner displayed above. After how many units of labor do diminishing returns set in?

When Burger Barn hires one worker, 10 customers can be served in an hour. When Burger Barn hires two workers, 25 customers can be served in an hour. The marginal product of the second worker is ________ customers served per hour.

Refer to the information provided in Figure 7.2 below to answer the question(s) that follow. Figure 7.2 -Refer to Figure 7.2. The marginal product of the first worker is ________ lawns moved.

You own a business that answers telephone calls for physicians after their offices close. You have an incentive to substitute capital for labor if the

The ________ to produce any given level of output is indicated by the point of tangency between an isocost line and the isoquant corresponding to that level of output.

Related to the Economics in Practice on page 151: Which of the following is the best analysis of the question of how fast delivery truck drivers should drive in order to reduce costs?

Refer to the information provided in Figure 7.9 below to answer the question(s) that follow. Figure 7.9 -Refer to Figure 7.9. The firm's isocost line would shift from CE to CD if

Perfectly competitive firms must make all of the following decisions except

The slope of the isoquant is

Refer to the information provided in Figure 7.9 below to answer the question(s) that follow. Figure 7.9 -Refer to Figure 7.9. The firm's isocost line could shift from AB to CD if

The marginal rate of technical substitution is the ratio of

Refer to Scenario 7.1 below to answer the question(s) that follow. SCENARIO 7.1: You are the owner and only employee of a company that writes computer software that is used by gamblers to collect sports data. Last year you earned a total revenue of $90,000. Your costs for equipment, rent, and supplies were $60,000. To start this business you invested an amount of your own capital that could pay you a return of $40,000 a year. -Refer to Scenario 7.1. Your accounting profit last year was

Firms have an incentive to substitute capital for labor as the

Refer to the information provided in Figure 7.9 below to answer the question(s) that follow. Figure 7.9 -Refer to Figure 7.9. The firm's isocost line would shift from CD to CE if

The marginal products of the first, second, and third workers are 50, 34, and 22, respectively. If four workers can produce 116 units of output, then the marginal product of the fourth worker is ________.

An act of production, as economists use the term, is demonstrated by which of the following?

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 the isocost line represents a total cost of $2,400, then the firm's cost of capital is ________ per unit and its cost of labor is ________ per unit.