Exam 11: Behind the Supply Curve: Inputs and Costs

When marginal cost is below average variable cost, average variable cost must be:

Marginal cost is the change in:

Figure: Short-Run Costs (Figure: Short-Run Costs) Look at the figure Short-Run Costs.C is the cost curve.

The long run is a period that is:

(Figure: The Marginal Product of Labor) Look at the figure The Marginal Product of Labor.The total product for three workers is:

(Table: Costs of Birthday Cakes) Annie has a bakery that specializes in birthday cakes, and her variable costs of producing cakes are shown in the table Costs of Birthday Cakes.Assume that her fixed costs are $10.What is the marginal cost of the second cake?

A firm's total fixed cost:

Some people use the phrase, "There are too many cooks in the kitchen" to describe any chaotic scene where nothing gets done.Relate this phrase to short-run production functions.

Figure: Short-Run Costs II (Figure: Short-Run Costs II) Look at the figure Short-Run Costs II.At six units of output, marginal cost is approximately:

A production function that is characterized by economies of scale will not be subject to the operation diminishing returns.True

A total product curve indicates the relationship between:

(Table: Cost Data) Look at the table Cost Data, which shows data for a designer purse factory.The average total cost of producing 6 purses is:

(Table: Costs of Producing Bagels) Look at the table Cost of Producing Bagels.Average total cost reaches its minimum value for the bagel.

(Table: Costs of Birthday Cakes) Annie has a bakery that specializes in birthday cakes, and her variable costs of producing cakes are shown in the table Costs of Birthday Cakes.Assume that her fixed costs are $10.What is the average variable cost of 4 cakes?

The long run is a planning period:

Figure: Short-Run Costs (Figure: Short-Run Costs) Look at the figure Short-Run Costs.The vertical difference between curve B And curve C at any quantity of output is:

When marginal cost is above average variable cost, average variable cost must be:

Figure: A Firm's Cost Curves (Figure: A Firm's Cost Curves) Look at the figure A Firm's Cost Curves.The curve X represents the firm's curve.

The change in total output resulting from a one-unit increase in the quantity of an input used, holding the quantities of all other inputs constant, is:

When a fine caterer produces 30 catered meals, its marginal cost and average variable cost each equal $10.Therefore, assuming normally shaped cost curves, at 29 meals: