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

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 could shift from AB to CD if

Firms cannot enter an industry in which positive profits are being earned in

The Wax Works sells 500 candles at a price of $10 per candle. The Wax Worksʹ total economic costs for producing 500 candles are $2,000. The Wax Worksʹ economic profit is

If marginal product is less than average product, then

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 is currently along isocost CD. If the price of capital is $40, then the price of labor is

Refer to the information provided in Figure 7.4 below to answer the question(s) that follow. Figure 7.4 -Refer to Figure 7.4. Diminishing marginal returns begin when the ________ worker is hired.

Refer to the information provided in Figure 7.11 below to answer the question(s) that follow. Figure 7.11 -Refer to Figure 7.11. If the firm's cost of capital is $18 per unit, then its cost of labor is ________ per unit.

A total cost curve shows the ________ of producing each level of output.

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 price of capital is $10 and the hourly price of labor is $20, which production technology should be selected?

The cost-minimizing equilibrium condition can be written as

There are 100 dog kennels in Atlanta. An economist studying the pricing behavior of dog kennels tells you that she is limiting her analysis to a time period that does not allow for any new dog kennels to enter the industry or for any established dog kennels to leave the industry. The time period this economist referred to is the

Refer to the information provided in Figure 7.4 below to answer the question(s) that follow. Figure 7.4 -Refer to Figure 7.4. The marginal product of the first worker is

At each point of tangency for isoquants and isocost lines, the slope of the isoquant must be ________ the slope of the isocost line.

Refer to the information provided in Figure 7.4 below to answer the question(s) that follow. Figure 7.4 -Refer to Figure 7.4. The average product of two workers is

The least costly way to produce any given level of output is indicated by

One decision that all firms must make is how much output to supply.

Refer to Scenario 7.2 below to answer the question(s) that follow. SCENARIO 7.2: You are the owner and only employee of a company that sets odds for sporting events. Last year you earned a total revenue of $100,000. Your costs for rent and supplies were $50,000. To start this business you invested an amount of your own capital that could pay you a return of $20,000 a year. -Refer to Scenario 7.2. Your economic profit last year was

Refer to Scenario 7.3 below to answer the question(s) that follow. SCENARIO 7.3: Upon graduating with an accounting degree, you open your own accounting firm of which you are the sole employee. To start the firm you passed on a job offer with a large accounting firm that offered you a salary of $60,000 annually. Last year you earned a total revenue of $100,000. Rent and supplies last year were $50,000. -Refer to Scenario 7.3. Your annual economic profit is

Refer to the information provided in Figure 7.1 below to answer the following question(s). Figure 7.1 -Refer to Figure 7.1. A corn producer's total revenue is $1,000. If she sells each bushel of corn for $5, she must be selling ________ bushels of corn.

Refer to the information provided in Figure 7.2 below to answer the question(s) that follow. Figure 7.2 -Refer to Figure 7.2. The marginal product of the second worker is ________ lawns mowed.