Exam 8: Short-Run Costs and Output Decisions

Alicia spends $20,000 on remodeling a storefront that she then opens as a flower shop. Her business has not been very successful, and she needs an additional $8,000 to keep the flower shop. Which of the following is true?

The formula for ________ is TFC/q.

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 two microwave ovens are produced, Micro Oven's total variable costs are

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 is producing the profit-maximizing level of output, her profit is

Refer to the information provided in Table 8.7 below to answer the following question(s). Table 8.7 Number of cruit Baskets TFC TVC TC MC 0 \ 50 \ 0 \ 50 -- 1 50 10 60 10 2 50 15 65 5 3 50 21 71 6 4 50 31 81 10 5 50 46 96 15 6 50 68 118 22 -Refer to Table 8.7. Assume that fruit baskets are sold in a perfectly competitive market. The market price of a fruit basket is $22. To maximize profits, Exotic Fruit should sell ________ fruit baskets and their profit is ________.

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 one pair of earrings, her total variable costs are

Average total cost

If a firm is producing where MR > MC

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 twelve microwave ovens are produced, Micro Oven's total fixed costs are

Refer to the information provided in Table 8.5 below to answer the question(s) that follow. Table 8.5 Number of Swords TVC MC AVC TFC TC AFC ATC 0 50 1 25 2 47.50 3 23.33 4 150 5 135 -Refer to Table 8.5. If Phoebe produces zero swords, her total fixed costs are

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. Assume the price of labor (L) is $5 per unit, the price of capital (K) is $10 per unit, and that firms attempt to minimize costs. The marginal cost of producing the third unit of output is

Both Stan and Kyle own potato chip factories. Stan's factory has low fixed costs and high variable costs. Kyle's factory has high fixed costs and low variable costs. Currently, each factory is producing 5,000 bags of potato chips at the same total cost. Complete the following statement with the correct answer. If each produces

Short-run costs that do not depend on the level of output are

Refer to the information provided in Figure 8.1 below to answer the question(s) that follow. Figure 8.1 -Refer to Figure 8.1 above. The total fixed costs for Cyndy's Floral Arrangements are $1,000. If Cyndy's Floral Arrangements produces 200 silk flower arrangements, the average fixed costs are

If demand in a perfectly competitive market increases, then an individual firm in that industry will see its profits fall.

The marginal revenue curve for a perfectly competitive firm is

If, ceteris paribus, demand in a perfectly competitive industry increases, the market price for the product will also increase.

In the short run

The Lawn Ranger, a landscaping company, has total costs of $5,000 and total fixed costs of $3,000. The Lawn Ranger's total variable costs are

________ is (are) most likely a variable cost for a firm.