Exam 11: Production and Cost Analysis I

Refer to the graph shown. This set of cost curves is:

In the short run, average variable cost equals:

In the short run:

The following graph shows average fixed costs, average variable costs, average total costs, and marginal costs of production. Why does the distance between curves II and III get smaller as quantity increases?

Fixed costs exist only in the:

A factory producing calculators employs four workers. At current levels of operation each worker produces 40 calculators per week. Assuming labor is the only variable input and the weekly wage is $400 per worker:

The vertical distance between the average total cost curve and the average variable cost curve is:

If marginal cost is less than average variable cost, average variable cost will:

Whenever the marginal cost curve lies below the average total cost curve, the:

When labor is the variable input, the average product equals the:

If average fixed cost is $2 and average variable cost is $3, total cost is $5.

Refer to the table shown. If the output of bicycles is 4 per week, the marginal cost of producing another bicycle per week is: Output (bicycles per week) Total cast (dollars) 1 100 2 200 3 310 4 440 5 580 6 730 7 900 8 1,200

The average total cost of producing electronic calculators in a factory is $20 at the current output level of 100 units per week. If fixed cost is $1,000 per week:

Total cost is:

Marginal product eventually:

Which of the following is the best example of a long-run decision?

Which of the following costs is independent of output?

Refer to the table shown. Marginal cost is minimized when how many units of output are produced? Units of output Total cost 0 5 1 11 2 16 3 20 4 23 5 25 6 26

Suppose you operate a factory that produces 500 lawn mowers a week. If your weekly variable cost is $40,000 and your weekly total cost is $50,000, the average:

Which short-run cost curve continually declines as output increases?