Exam 11: Behind the Supply Curve: Inputs and Costs

Use the following to answer questions: -(Table: Costs of Producing Bagels) Look at the table Cost of Producing Bagels. Average total cost reaches its minimum value for the _____ bagel.

If marginal cost is GREATER THAN average total cost:

The average total cost of producing cell phones in a factory is $20 at the current output level of 100 units per week. If fixed cost is $1,200 per week:

Use the following to answer questions: -(Table: Cakes) Look at the table Cakes. Pat is opening a bakery to make and sell special birthday cakes. She is trying to decide how many mixers to purchase. Her estimated fixed and average variable costs if she purchases one, two, or three mixers are shown in the table. Assume that average variable costs do not vary with the quantity of output. If Pat purchases one mixer and bakes 100 cakes per day, what is her average fixed cost?

The eventual increase in AVC as output increases is the _____ effect.

If output increases, a firm will move along its short-run average total cost curve in the short run until it has time to adjust its fixed cost.

Use the following to answer questions: -(Figure and Table: Variable, Fixed, and Total Costs) Look at the figure and table Variable, Fixed, and Total Costs. The marginal cost of increasing production from 51 to 64 bushels of wheat is:

Use the following to answer questions: -(Table: Cost Data) Look at the table Cost Data. The marginal cost of producing the fourth purse is:

Use the following to answer questions: -(Table: Cost Data) Look at the table Cost Data. The average fixed cost of producing 5 purses is:

A cost that does not depend on the quantity of output produced is:

For most restaurants, the average total cost curve _____ at _____ levels of output, then _____ at _____ levels.

When an increase in the firm's output reduces its long-run average total cost, it has _____ returns to scale.

Use the following to answer questions: -(Table: Tonya's Production Function for Apples) Look at the table Tonya's Production Function for Apples. Tonya's variable:

Use the following to answer questions: -(Table: Cakes) Look at the table Cakes. Pat is opening a bakery to make and sell special birthday cakes. She is trying to decide how many mixers to purchase. Her estimated fixed and average variable costs if she purchases one, two, or three mixers are shown in the table. Assume that average variable costs do not vary with the quantity of output. If Pat purchases three mixers and bakes 400 cakes per day, what is her average fixed cost?

Use the following to answer questions: -(Table: Cost Data) Look at the table Cost Data. When the purse factory produces 5 units of output (purses):

When all of a firm's inputs are doubled, input prices do not change, and this results in the firm's level of production more than doubling, a firm is operating:

In the long run:

Use the following to answer questions: -(Table: Cakes) Look at the table Cakes. Pat is opening a bakery to make and sell special birthday cakes. Her estimated fixed and average variable costs if she purchases one, two, or three mixers are shown in the table. Assume that average variable costs do not vary with the quantity of output. Suppose that Pat used to produce 100 cakes, but she has a sudden increase in demand, so that she begins to produce 200 cakes. Explain how her average total cost will change in the short run and in the long run.

Use the following to answer questions: Figure: Short-Run Costs -(Figure: Short-Run Costs) Look at the figure Short-Run Costs. C is the _____ cost curve.

Suppose the marginal cost curve in the short run first decreases and then increases. If marginal cost is decreasing, _____ must be _____ and _____ must be _____.