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

To minimize costs, a firm should use more capital and less labor if the product derived from the last dollar spent on labor is ________ the product derived from the last dollar spent on capital.

When Burger Barn hires one worker, 10 customers can be served in an hour. When Burger Barn hires two workers, 25 customers can be served in an hour. The marginal product of the second worker is ________ customers served per hour.

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 slope of isocost CD 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 CD to CE if

At the Pampered Pet Salon the marginal products of the first, second, and third workers are 50, 36, and 25 dogs washed, respectively. The total product (number of dogs washed) of the first two workers is

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 average product of the first worker is ________ lawns moved.

What is the formula for the average product of labor?

At the Pampered Pet Salon the marginal products of the first, second, and third workers are 50, 36, and 25 dogs washed, respectively. The total product (number of dogs washed) of the three workers is

You own a business that answers telephone calls for physicians after their offices close. You have an incentive to substitute capital for labor if the

Related to the Economics in Practice on page 154: According to the Economics in Practice feature, the managerial part of the United States Technical Assistance and Productivity Program

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 firm is currently along isocost CE. If the price of capital is $24, then the price of labor is

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 firm's isocost line would shift from CE to CD if

The formula for the marginal product of labor is

A firm produces 5 units of output from the last dollar it spends on labor and 10 units from the last dollar spent on capital. The firm should

Refer to the information provided in Figure 7.6 below to answer the question(s) that follow. Figure 7.6 -Refer to Figure 7.6. If the price of capital is $20 and the price of labor is $10, the optimal product technique is

If economic profit is zero, a firm

Refer to Scenario 7.8 below to answer the question(s) that follow. SCENARIO 7.8: A swimming pool cleaning company has the following production possibilities. With one, two, three, and four workers, the company can clean 5, 12, 17, and 20 pools per day, respectively. -Refer to Scenario 7.8. The marginal product of the third worker is

Refer to Scenario 7.8 below to answer the question(s) that follow. SCENARIO 7.8: A swimming pool cleaning company has the following production possibilities. With one, two, three, and four workers, the company can clean 5, 12, 17, and 20 pools per day, respectively. -Refer to Scenario 7.8. The marginal product of the second worker is

Refer to Scenario 7.5 below to answer the question(s) that follow. SCENARIO 7.5: You own and are the only employee of a company that customizes bicycles. Last year your total revenue was $60,000. Your costs for rent and supplies were $25,000. To start this business you invested an amount of your own capital that could pay you a $45,000 a year return. -Refer to Scenario 7.5. During the year your economic costs were

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 total product of six workers is