Exam 7: The Production Process: the Behavior of Profit-Maximizing Firms

Refer to the information provided in Figure 7.1 below to answer the following question(s). Figure 7.1 -Refer to Figure 7.1. This corn producer produces 100 bushels of corn and sells each bushel at $5. The cost of producing each bushel is $2. This corn producer's total revenue is ________ and profit is ________.

Refer to the information provided in Figure 7.9 below to answer the question(s) that follow. Figure 7.9 -Refer to Figure 7.9. The firm's isocost line would shift from CE to CD if

If Pets.com is earning a rate of return less than necessary for the business to continue operations, then

Refer to the information provided in Figure 7.3 below to answer the question(s) that follow. Figure 7.3 -Refer to Figure 7.3. The marginal product of the first worker is ________ yards raked.

Refer to the information provided in Figure 7.10 below to answer the question(s) that follow. Figure 7.10 -Refer to Figure 7.10. If the isocost line represents a total cost of $2,400, then the firm's cost of capital is ________ per unit and its cost of labor is ________ per unit.

Refer to the information provided in Figure 7.8 below to answer the question(s) that follow. Figure 7.8 -Refer to Figure 7.8. The slope of isocost CD is

When Burger Barn hires one worker, 20 customers can be served in an hour. When Burger Barn hires two workers, 50 customers can be served in an hour. The marginal product of the second worker is ________ customers served per hour.

Refer to Scenario 7.7 below to answer the question(s) that follow. SCENARIO 7.7: A lawn service company has the following production possibilities. With one, two, three, and four workers, the company can mow 4, 9, 12, and 14 lawns per day, respectively. -Refer to Scenario 7.7. Diminishing returns to labor set in with the ________ worker.

The version of the law of diminishing returns that applies to production

A firm is operating such that the marginal product of labor is 48 and the marginal product of capital is 12. The firm is minimizing its costs only if

Refer to the information provided in Figure 7.8 below to answer the question(s) that follow. Figure 7.8 -Refer to Figure 7.8. The slope of isocost AB is

Use the information provided in Table 7.2 below to answer the question(s) that follow. Inputs Required to Produce a Product Using Alternative Technologies Technology Units of Capital Number of Employees A 16 8 B 12 12 C 8 20 D 6 24 -Refer to Table 7.2. If the hourly wage rate is $10 and the hourly price of capital is $50, which production technology should be selected?

Firms in an economy with high capital costs have an incentive to use more ________ techniques.

Assume the total product of two workers is 160 and the total product of three workers is 180. The three worker's average product is ________ while the third worker's marginal product is ________.

The process by which inputs are combined, transformed, and turned into outputs is called

At the Larson Bakery the marginal products of the first, second, and third sales clerks are 30, 27, and 21 customers served, respectively. The total product (number of customers served) of the three sales clerks is

Refer to the information provided in Figure 7.3 below to answer the question(s) that follow. Figure 7.3 -Refer to Figure 7.3. The average product of the first worker is ________ yards raked.

Use the information provided in Table 7.4 below to answer the question(s) that follow. Table 7.4 Inputs Required to Produce a Product Using Alternative Technologies Technology Units d Capital Number of Employees A 8 36 B 12 24 C 16 16 D 24 12 -Refer to Table 7.4. If the hourly price of capital is $40 and the hourly wage rate is $10, which production technology should be selected?

Assume the total product of two workers is 110 and the total product of three workers is 120. The three worker's average product is ________ while the third worker's marginal product is ________.

Costs of production are determined