Exam 11: Behind the Supply Curve: Inputs and Costs

Figure: Long-Run and Short-Run Average Cost Curves (Figure: Long-Run and Short-Run Average Cost Curves) Look at the figure Long-Run and Short-Run Average Cost Curves.If a firm faced the long-run average total cost curve shown in the figure and it expected to produce 100,000 units of the good in the long run, the firm should build the plant associated with:

(Table: Production of Bagels) Look at the table Production of Bagels.The marginal product of the fifth worker is bagels.

Suppose Cyd knows the average total cost of producing 9 scones is $5, while the average total cost of producing 10 scones is $5.20.What is the marginal cost of the 10th scone?

(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 average fixed cost of 5 cakes?

Figure: A Firm's Cost Curves (Figure: A Firm's Cost Curves) Look at the figure A Firm's Cost Curves.The curve labeled W Represents the firm's curve.

As a firm increases production in the short run, the marginal cost of output increases because the marginal product of the variable input decreases.False

When a cherry orchard in Oregon adds a worker, the total cost of production increases by $24,000.Adding the worker increases total cherry output by 600 pounds.Therefore, the marginal cost of the last pound of cherries produced is:

Figure: The Total Product (Figure: The Total Product) Look at the figure The Total Product.Labor added L1 and up to L2 is:

In the short run, why is it believed that the total product curve increases at a decreasing rate when more labor is added to the production function?

Assuming that all other factors of production are held constant, marginal product is the change in ________ output resulting from a one-unit change in _ .

In the short run, as output gets larger and larger:

If an eyeglass business produces 10 pairs of eyeglasses and incurs $30 in average variable cost and $5 in average fixed cost, then average total cost is:

The fixed cost curve is:

If average total cost is declining, marginal cost cannot be increasing.True

If marginal cost is less than average total cost, then:

The larger the output, the greater the quantity of output over which fixed cost is spread.Called the ________ effect, this leads to a _.

A firm that is able to utilize more efficiently its inputs as it increases production in the long run is an example of:

(Table: Lindsay's Farm) Look at the table Lindsay's Farm.Lindsay's fixed cost of production equals:

Describe the shape of the AFC curve and explain why it takes this shape.Can AFC ever intersect the x-axis?

The marginal product of labor is: