Exam 11: Behind the Supply Curve: Inputs and Costs

Use the following to answer questions: -(Table: Costs of Birthday Cakes) Look at the table Costs of Birthday Cakes. Assume that fixed costs are $10. What is the average fixed cost of 4 cakes?

Use the following to answer questions: -(Table: Output and Costs) Look at the table Output and Costs. When output is 4, total variable cost equals:

Average variable cost is the ratio of:

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 two mixers and bakes 400 cakes per day, what is her average total cost?

Which of the following cost concepts is correctly defined?

A firm's long-run average total costs increase as it produces more output. This firm has:

Use the following to answer questions: -(Table: Costs of Birthday Cakes) Look at the table Costs of Birthday Cakes. Assume that fixed costs are $10. What is the average fixed cost of 2 cakes?

Use the following to answer questions: Figure: The Total Product -(Figure: The Total Product) Look at the figure The Total Product. Labor added from L₁ and up to L₂ is:

The sum of fixed and variable costs is _____ cost.

At the current level of output, Becca Furniture's marginal cost curve is above the average total cost curve. This means Becca Furniture's average total cost curve:

A firm that has diminishing returns in the management's ability to use and disseminate information as it increases production in the long run best demonstrates:

A university that benefits from lower costs per enrolled student as it builds more buildings and enrolls more students is an example of a service provider with:

Use the following to answer questions: -(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?

The larger the output, the more variable input required to produce additional units. Called the _____ effect, this leads to a ______ average _____ cost.

If a firm builds a larger plant and increases output and if its long-run average total cost does not change, the firm has constant returns to scale.

Use the following to answer questions: -(Table: Cost Data) Look at the table Cost Data. The average variable cost of producing 2 purses is:

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 two mixers and bakes 100 cakes per day, what is her average fixed cost?

Use the following to answer questions: Figure: Short-Run Costs -(Figure: Short-Run Costs) Look at the figure Short-Run Costs. At 7 units of output, average fixed cost is approximately _____, and average variable cost is approximately _____.

In the long run, some of a firm's costs are fixed, while others are variable.

When a firm adds physical capital, its fixed cost will decrease in the short run.