Exam 8: Short-Run Costs and Output Decisions

Both Kate and John own saltwater taffy factories. Kate's factory has low fixed costs and high variable costs. John's factory has high fixed costs and low variable costs. Currently, each factory is producing 1,000 boxes of taffy at the same total cost. Complete the following statement with the correct answer. If each produces

Refer to the information provided in Figure 8.2 below to answer the question(s) that follow. Figure 8.2 -Refer to Figure 8.2 above. If The Barber Shop produces more than 300 hair cuts, the average fixed costs are

Refer to the short-run information provided in Figure 8.5 below to answer the question(s) that follow Figure 8.5 -Refer to Figure 8.5. If two drones are produced, average variable costs are

Economists do not consider the smartphone industry perfectly competitive because

As output decreases, average fixed costs

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow. Figure 8.8 -Refer to Figure 8.8. If this farmer produces the profit-maximizing level of soybeans when the market price is ________ per bushel, then her profit would be $0.

A short-run total cost schedule is a ________ cost schedule shifted upward by the amount of ________ cost.

At a particular level of output, the difference between average total cost and average fixed cost is average variable cost.

Refer to the information provided in Figure 8.8 below to answer the question(s) that follow. Figure 8.8 -Refer to Figure 8.8. At the market price of $8 per bushel, if this farmer produces the profit-maximizing level of soybeans, the total revenue would be

Perfectly competitive firms

Refer to the information provided in Table 8.4 below to answer the question(s) that follow. Table 8.4 Produce Using Techniques Units of Variable K Inputs L 1 unit of output A 4 4 B 2 6 2 units of output A 7 6 B 4 10 3 units of output A 8 6 B 6 11 -Refer to Table 8.4. Assuming the price of capital (K) is $10 per unit and the price of labor (L) is $5 per unit, the firm will use production technique ________ to produce ________ of output.

A perfectly elastic demand curve implies that, ceteris paribus,

Refer to the information provided in Figure 8.6 below to answer the question(s) that follow. Figure 8.6 -Refer to Figure 8.6. Average total cost is represented by

________ cost refers to the full economic costs of production.

Refer to the information provided in Table 8.6 below to answer the question(s) that follow. Table 8.6 $\text {Number of}$ Earrings TVC MC AVC TFC TC AFC ATC 0 1 10 2 5 15 3 55 4 10 5 90 -Refer to Table 8.6. What is the total cost of producing zero units of output?

Refer to the information provided in Figure 8.9 below to answer the question(s) that follow. Figure 8.9 -Refer to Figure 8.9. If this farmer produces the profit-maximizing level of hay when the market price is $18 per bale, her total cost would be

Assume the wool industry is perfectly competitive. The market demand curve for wool is ________ and each individual wool producer's demand curve is ________.

Refer to the short-run information provided in Figure 8.5 below to answer the question(s) that follow Figure 8.5 -Refer to Figure 8.4. If six microwave ovens are produced, Micro Oven's total fixed costs are

The profit-maximizing level for all firms in ________ is the output level where MC = MR.

The Lawn Ranger, a landscaping company, has total costs of $5,000 and total variable costs of $1,000. The Lawn Ranger's total fixed costs are