Exam 7: Producers in the Short Run

The table below provides information on output per month and short- run costs for a firm producing outdoor wooden lounge chairs. TFC TVC TC 5 200 200 400 10 200 220 420 15 200 240 440 20 200 260 460 25 200 350 550 30 200 810 1010 TABLE 7- 5 -Refer to Table 7- 5.Given the information in the table about short- run costs,this firm would minimize the average variable cost of production when producing

A firm's short- run marginal cost curve is decreasing when

A firm can raise financial capital without incurring debt by

The period of time over which the firm can vary its technology of production is the

When a firm's total- product curve is increasing at a decreasing rate

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.Marginal product of labour begins decreasing with the unit of labour hired.Average product of labour begins decreasing with the unit of labour hired.

With regard to economic decision making for firms,the long run is a period in which

The table below provides the total revenues and costs for a small landscaping company in a recent year. $\begin{array}{|l|l|}\hline \text { Total Revenues }(\$) & 250000 \\\hline & \\\hline \text { Total Costs }(\$) & \\\hline \text { wages and salaries } & 150000 \\\hline \text { risk-free return of } 2 \% \text { on owner's capital of } \$ 20000 & 400 \\\hline \text { - interest on bank loan } & 1500 \\\hline \text { - cost of supplies } & 27000 \\\hline \text { depreciation of capital equipment } & 8000 \\\hline \text { additional wages the owner could have earned in next } & 30000 \\\text { best alternative } & \\\hline \text { - risk premium of } 4 \% \text { on owner's capital of } \$ 20000 & 800 \\\hline\end{array}$ TABLE 7- 2 -Refer to Table 7- 2.The explicit costs for this firm are

The theory of the firm is based on the following two key assumptions:

The point of diminishing marginal productivity is the point where

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.Diminishing marginal productivity of labour is first observed when the firm changes the amount of labour hired from

The vertical distance between the total cost curve and the total variable cost curve is

Suppose a firm producing digital cameras is operating such that marginal costs are higher than average costs.If the firm produces one more camera,average costs will

The period of time over which all factors of production and technology are variable is known as the

Suppose NHL hockey player Jarome Iginla is averaging three points per game going into the last game of the season in which he collects four points,thereby changing his average for the season.To use an analogy in economics,it could be said that average product increases

Real capital includes

The law of diminishing returns states that if increasing quantities of a variable factor are applied to a given quantity of fixed factors,then

The relationship between factors of production used in the production process and the resulting output is called a(n)

Suppose a firm is producing 500 units of output,incurring a total cost of $700 000 and total fixed cost of $100 000.It can be concluded that average variable cost is

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. L abour 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 product of labour is highest when the firm hires