Exam 11: Behind the Supply Curve: Inputs and Costs

Figure: The Total Product (Figure: The Total Product) Look at the figure The Total Product.After hiring L2 labor and producing at point B on the total product curve, hiring more labor beyond L2 would result in which of the following statements being true of the total product curve?

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, when 51 bushels of wheat is produced, the average fixed cost is , Average variable cost is ________, and average total cost is _.

In the long run, every input available to a television manufacturer is a fixed input.True

The level of inputs will determine a firm's:

As defined in the text, the long run is a planning period:

Ashley Bakery expects its marginal cost curve will eventually slope upward, because as with most production processes, baking has:

Suppose a short-run production function always increases at a constant rate of three units of output for every additional worker added.What does this imply about the marginal product of labor? Is this realistic? Explain.

Think about running a restaurant.For this restaurant:

The marginal cost curve intersects the average variable cost curve at:

(Table: Production of Cabinets) Look at the table The Production of Cabinets.If each cabinetmaker could be hired at no cost, how many workers would your firm employ?

If Marie Marionettes is operating under conditions of diminishing marginal product, the marginal costs will be:

Figure: The Average Total Cost Curve (Figure: The Average Total Cost Curve) Look at the figure The Average Total Cost Curve.In the figure, the total cost of producing three pairs of boots is approximately:

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

The change in total cost resulting from a one-unit change in quantity is:

(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.The minimum average variable cost occurs at what output?

The average total cost curve has a U-shape because the effect is dominant at low levels of output, and the effect is dominant at high levels of output.

An input whose quantity cannot be changed in the short run is:

In the long run:

(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 variable cost of 5 cakes?

In the short run, the average total cost curve slopes upward because of: