Exam 7: Producers in the Short Run

Suppose a firm is producing 250 units of output.At this level of output,average fixed costs are $20 per unit and average variable costs are $80 per unit.It can be concluded that total cost is

Consider a basket-producing firm with fixed capital.If the firm can produce 24 baskets per day with 3 workers and then increases production to 36 baskets per day with 4 workers,then which of the following statements is definitely true?

Suppose a firm with the usual U-shaped cost curves is producing a level of output such that its short run costs are as follows: ATC = $0.37 per unit AVC = $0.32 per unit AFC = $0.05 per unit MC = $0.43 per unit Given these short run costs,which of the following statements is true?

The table below provides the annual revenues and costs for a family-owned firm producing catered meals. TABLE 7-1 -Refer to Table 7-1.To an accountant,this family-owned catering companyis earning ________. To an economist, the same firm is earning ________.

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

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

Consider a firmʹs short-run cost curves.When capital is a fixed factor,a rise in the cost of labour

Consider a basket-producing firm with fixed capital.If the firm can produce 36 baskets per day with 3 workers and then increases production to 44 baskets per day with 4 workers,then which of the following statements is true?

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. TABLE 7-3 -Refer to Table 7-3.The average variable cost when this firm is producing 10 units of output is

Suppose a firm with the usual U-shaped cost curves is producing a level of output such that its short-run costs are as follows: ATC = $0.37 per unit AVC = $0.32 per unit AFC = $0.05 per unit MC = $0.43 per unit Given these short-run costs,as the firm increases its output,which of the following statements is true?

The opportunity cost to a firm of using an asset is zero if

A firmʹs capacity is defined as the level of output where

A single proprietorship is a form of business organization which

The table below provides information on output per month and short-run costs for a firm producing outdoor wooden lounge chairs.All costs are in dollars. TABLE 7-5 -Refer to Table 7-5.What is the average total cost of producing 25 chairs?

Undistributed profits of a firm are

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. TABLE 7-4 -Refer to Table 7-4.The marginal product of labour is at its maximum when the firm changes the amount of labour hired from

The table below shows output,marginal cost,and average variable cost for the production of pairs of shoes.All costs are in dollars. 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 firmʹs production?

A limited partnership differs from an ordinary partnership by

Suppose a production function for a firm takes the following algebraic form: Q = (0.25)K × (1.5)L²,where Q is the output of garage doors produced per month.Now suppose the firm is operating with 10 units of capital (K = 10)and 8 units of labour (L = 8).What is the output of garage doors per month?

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. TABLE 7-4 -Refer to Table 7-4.The total fixed cost of producing 305 units of output is