Exam 11: Behind the Supply Curve: Inputs and Costs

Suppose the marginal cost curve in the short run first decreases, then reaches a minimum, and then increases.If we are at an output where marginal cost is decreasing, then:

Figure: Change in the Total Product (Figure: Change in the Total Product) Look at the figure Change in the Total Product.The figure shows a production function that moves from TP₁ to TP₂.Based upon this change, what has happened to the marginal product of labor curve?

(Table: Costs for 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 fourth cake?

In some complex production processes (such as nuclear power plants), some inputs have to be treated as being fixed even in the long run.True

If an eyeglass business produces 10 pairs of eyeglasses and incurs $35 in average total cost and $5 in average fixed cost, then average variable cost is:

Figure: Change in the Total Product (Figure: Change in the Total Product) Look at the figure Change in the Total Product.The figure shows a production function that moves from TP₁ to TP₂.Which of the following choices is a likely cause of this shift?

Scott operates a business that takes people on boat tours in Crystal River, Florida.The amount of fuel Scott uses each day is a variable input.False

The sum of fixed and variable costs is:

Figure and Table: Variable, Fixed, and Total Costs (Figure and Table: Variable, Fixed, and Total Costs) Look at the figure and table Variable, Fixed, and Total Costs.In the figure, the marginal cost when increasing production from 84 to 91 bushels of wheat is:

When Caroline's dress factory hires two workers, the total product is 50 dresses.When she hires three workers, total product is 60, and when she hires four workers, total product is 75.The slope of the marginal product curve when two to four workers are hired is

In the long run, all costs are:

Average variable cost is the ratio of:

(Table: Tonya's Production Function for Apples) Look at the table Tonya's Production Function for Apples.Tonya's fixed:

If Jakob, who runs a sports jersey assembly factory, knows the marginal cost of the first sports jersey is $21, the marginal cost of the second sports jersey is $40, and the marginal cost of the third jersey is $17, what is the total variable cost of producing three jerseys?

Figure: The Total Product (Figure: The Total Product) Look at the figure The Total Product.For hiring labor between zero and L1, which of the following statements is true?

The slope of a long-run average total cost curve exhibiting diseconomies of scale is:

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

(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 2 cakes?

As output increases, the total cost curve