Exam 7: Producers in the Short Run

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?

Diminishing marginal product of labour is said to exist when there is

A firm can raise financial capital without incurring debt by

If Michelle used $1000 from her savings account, which was paying 6% interest annually, to invest in her brotherʹs 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

Suppose sport-fishermen on the Campbell River in British Columbia are catching fewer fish and are having to fish many more hours to catch them. However, the total number of fish caught on the river continues to increase. The river is experiencing

In the short run, the firmʹs product curves show

The diagram below shows some short-run cost curves for a firm. FIGURE 7-2 -Refer to Figure 7-2. Which of the following choices correctly identifies the cost curves in part i) of the figure?

Suppose that a firmʹs capital is fixed and one more unit of labour is hired, thereby increasing the firmʹs total output. Which of the following statements can be correct? 1) Marginal cost would remain constant. 2) Marginal cost would increase. 3) Marginal cost would decrease.

The table below provides the total revenues and costs for a small landscaping company in a recent year. TABLE 7-2 -With regard to economic decision making for firms, the short run is

Suppose a firm is producing 100 units of output, incurring a total cost of $10 000 and total variable cost of $6000. It can be concluded that average fixed 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. TABLE 7-3 -Refer to Table 7-3. The average total cost when this firm is producing zero units of output is

A firmʹs capacity is defined as the level of output where

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. If this firm is producing 111 units of output per period, its marginal cost is

FIGURE 7-1 -Refer to Figure 7-1. Total product is increasing at an increasing rate

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 30 chairs?

ʺAn objective of firms is to maximize profits.ʺ This statement

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 company is earning . To an economist, the same firm is earning .

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?

Consider a firmʹs short-run cost curves. If average total cost is increasing as output rises, then