Exam 7: Producers in the Short Run

The table below shows output,marginal cost,and average variable cost for the production of pairs of shoes.All costs are in dollars. Output Marginal Cost Average Variable Cost 50 60 140 70 45 115 90 35 95 110 30 80 130 35 65 150 60 60 170 105 65 190 180 75 210 230 90 230 290 110 TABLE 7- 6 -Refer to Table 7- 6.Suppose there are no fixed costs.The firm reaches it's capacity level of output when its output is equal to units.

Refer to Table 7- 3.The average variable cost when producing 132 units of output is approximately

Economists use the notation Q = f(L,K)to describe

Suppose that when a firm hires one additional unit of labour,total product increases from 100 to 110 units of output per month.Marginal product must therefore be

When a plant is operating at the level of output where its short- run average total cost is at its minimum,

Consider the short- run costs of a firm.Suppose the firm's total fixed costs are $100 and average variable costs are constant regardless of output.Which of the following is then true?

If Michelle used $1000 from her savings account,which was paying 6% interest annually,to invest in her brother's new sporting- goods store,the opportunity cost of her investment on an annual basis would be

If increasing quantities of a variable factor are applied to a given quantity of fixed factors,then the law of diminishing returns tells us that

The following data show the total output for a firm when different amounts of labour are combined with a fixed amount of capital.Assume that the wage per unit of labour is $10 and the cost of the capital is $50. Lab our per period Total output per period 0 0 1 10 2 30 3 90 4 132 5 150 TABLE 7- 3 -Refer to Table 7- 3.The average total cost when producing 90 units of output is approximately

Which of the following items is part of a firm's financial capital as distinct from its real capital?

The table below shows output,marginal cost,and average variable cost for the production of pairs of shoes.All costs are in dollars. Output Marginal Cost Average Variable Cost 50 60 140 70 45 115 90 35 95 110 30 80 130 35 65 150 60 60 170 105 65 190 180 75 210 230 90 230 290 110 TABLE 7- 6 -Refer to Table 7- 6.The firm's marginal product of its variable factor is maximized when it produces units of output.

The period of time over which the firm can vary any of its inputs for a given production technology is called the

The following data show the total output for a firm when specified amounts of labour are combined with a fixed amount of capital.When answering the questions,you are to assume that the wage per unit of labour is $25 and the cost of the capital is $100. Labour per unit of time Total output 0 0 1 25 2 75 3 175 4 250 5 305 TABLE 7- 4 -Refer to Table 7- 4.The total fixed cost of producing 305 units of output is

The equation Q = 0.5KL - (0.4)L + 2L2 is an example of

Short- run cost curves for a firm are eventually upward- sloping because of the effects of

Consider a firm in the short run.If AP = MP and both are positive,then total product

Marginal cost is defined as the

The table below shows output,marginal cost,and average variable cost for the production of pairs of shoes.All costs are in dollars. Output Marginal Cost Average Variable Cost 50 60 140 70 45 115 90 35 95 110 30 80 130 35 65 150 60 60 170 105 65 190 180 75 210 230 90 230 290 110 TABLE 7- 6 -Refer to Table 7- 6.Suppose this firm is producing 210 pairs of shoes per time period and that the variable factor of production is labour.Which of the following statements best describes this firm's production?

Which of the following statements about the relationship between marginal product and average product is correct?

With regard to economic decision making for firms,the short run is