Exam 8: Short-Run Costs and Output Decisions

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 falls to $8, then to maximize profits this farmer should produce

Refer to the information provided in Table 8.1 below to answer the question(s) that follow. Table 8.1 Produce Using Techniques Units of Variable K Inputs L 1 unit of output A 8 8 B 4 12 2 units of output A 14 12 B 8 20 3 units of output A 16 12 B 12 22 -Refer to Table 8.1. In the short run, if the price of labor (L) is $5 per unit, the price of capital (K) is $10 per unit, and firms attempt to minimize costs, then this firm's total cost of producing one unit of output is

The Framing Gallery frames posters. The Framing Gallery has total fixed costs of $500. The Framing Gallery's average variable cost is $20 and its average total cost is $25. The Framing Gallery is currently framing

In the short run, a firm using variable labor and fixed capital inputs achieves the ________ level of output at the minimum point on its average total cost curve.

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 the market price of hay ________, then to maximize profits this farmer should produce 350 bales of hay.

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. Outdoor Equipmentʹs ________ are minimized at the output level where curves 1 and 3 intersect.

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

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. Outdoor Equipment's average variable costs are minimized at the output level

________ is ΔTR/Δq.

A firm in a perfectly competitive market has no control over price because

If the marginal cost curve is above the average variable cost curve, then

A farmer producing bushels of soybeans in the perfectly competitive soybean industry is currently maximizing profits. If the market price of soybeans increases and the farmer adjusts output to the new price, he will produce ________ soybeans and make ________ profit.

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. At the market price of $18 per bale, if this farmer produces the profit-maximizing level of hay, the total revenue would be

The main decision for a profit-maximizing perfectly competitive firm is not what ________ but what ________.

Perfectly competitive firms will produce as long as marginal revenue exceeds marginal cost.

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 lowest long-run total cost of producing one unit of output is

Total cost refers to

Perfectly competitive firms minimize their losses by producing the output level where P = MR = AVC.

Firms maximize their profits by producing the output level where MR = MC.

One formula for ________ is ΔTVC/Δq.