Exam 12: Production and Cost Analysis II

Refer to the graph shown. If a firm expected to produce 900 units when it built its plant but now desires to reduce its output to 600 units in the short run, it will use the plant size represented by:

A technically efficient method of production produces a given level of output at the lowest possible cost.

Refer to the graph shown. A firm that produces 900 units of output using the plant size associated with SATC₃ minimizes:

A social entrepreneur's central motivation in creating "for-benefit" corporations is to achieve social, not just economic, ends.

If a firm is able to lower total costs by specializing in marketing and distribution while outsourcing production, it is taking advantage of:

At one time, sea lions were depleting the stock of steelhead trout. One idea to scare sea lions away from the Washington coast was to launch fake killer whales, which are predators of sea lions. The cost of making the first whale is $16,000 ($5,000 for materials and $11,000 for the mold). The mold can be reused to make additional whales, and so additional whales cost $5,000 each. Based on these numbers, the production of fake killer whales exhibits:

The long-run average cost curve is typically:

The graph shown exhibits diseconomies of scale:

The short-run average total cost curve is generally assumed to be:

Suppose a factory that produces toasters experiences a decline in its average total cost with no change in its output level. This decline might be explained by:

If a firm is operating at the point of tangency between an isoquant and an isocost line, its production is:

As you move down an isoquant:

Generally, as the size of a firm increases:

At one time sea lions were depleting the stock of steelhead trout. One idea to scare sea lions away from the Washington coast was to launch fake killer whales, which are predators of sea lions. The cost of making the first whale is $16,000 ($5,000 for materials and $11,000 for the mold). The mold can be reused to make additional whales, and so additional whales cost $5,000 each. Based on these numbers, the total cost of making two fake killer whales would be:

Constant returns to scale are associated with a:

Economic efficiency is achieved at a particular output level if:

Because there are very significant economies of scale involved in making flat screen television sets in a competitive market, the price of flat screen TVs will:

Refer to the graph shown. Given the long-run average cost curve, the minimum efficient scale of production is:

The long-run average cost curve is tangent to the short-run average total cost curve at the minimum point of the short-run average total cost curve when the:

Which of the following is most likely an example of diseconomies of scale?