Exam 8: Short-Run Costs and Output Decisions

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 marginal cost of producing the third unit of output is

Any firm's total revenue equals

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 the market price of soybeans ________, then to maximize profits this farmer should produce 700 bushels of soybeans.

Total variable cost divided by output is average variable cost.

The Farley Farm, a dairy company, has total costs of $15,000 and total variable costs of $2,000. The Farley Farm's total fixed costs are

If there is a decrease in industry supply while the industry demand curve remains the same, then an individual firm in a perfectly competitive industry currently earning losses will see its losses

A firm in a perfectly competitive industry produces its profit-maximizing quantity, 40 units. Industry price is $3, total fixed costs are $45, and total variable costs are $60. The firm's economic profit is

The fast-food industry is not considered perfectly competitive because

The marginal cost curve intersects the average variable cost curve at the ________ value of the average variable cost curve.

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 variable cost is represented by

Total variable cost ________ as output increases, and total fixed cost ________ as output increases.

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. The marginal cost of the fourth unit is ________ and the average total cost of four units is ________.

The marginal cost curve intersects the average total cost curve at its minimum point.

Assume Robbie's Robots operates in a perfectly competitive market producing 3,000 robots per day. At this output level, the selling price is $800 per robot and the marginal cost is $800 per robot. To maximize profits, Robbie's Robots should

Dominic sells pizza slices for $5 on the Santa Monica Pier. He currently sells 500 slices of pizza per day.This is a perfectly competitive business, and Dominic faces a perfectly price elastic demand curve. If he wants to try to increase daily revenues to $3,000, he should

If a perfectly competitive firm's average total cost curve is below its demand schedule at any level of output, then the firm will earn ________ profits.

Refer to the information provided in Table 8.2 below to answer the question(s) that follow. Table 8.2 $\text {Number of}$ Earrings TVC MC AVC TFC TC AFC ATC 0 100 1 50 2 95 3 46.67 4 300 5 270 -Refer to Table 8.2. If Sherry produces zero earrings, her total fixed costs are

The relationship between the price that a perfectly competitive firm can charge buyers and the firm's marginal revenue is that the price is ________ marginal revenue over all output.

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. What is the total revenue from producing the profit-maximizing level of output?

TC/q is