Exam 11: Behind the Supply Curve: Inputs and Costs

Use the following to answer questions: Figure: Short-Run Costs II -(Figure: Short-Run Costs II) Look at the figure Short-Run Costs II. Curve 1 is the _____ cost curve.

Use the following to answer questions: -(Table: Production Function for Soybeans) Look at the table Production Function for Soybeans. Assume that the fixed input, capital, is 10 acres of land and a tractor, which have a combined cost of $150 per day. The cost of labor is $100 per worker per day. The total cost of producing 45 bushels of soybeans is:

The _____ cost curve is NOT affected by diminishing returns.

When marginal cost is above average variable cost, average variable cost must be:

Use the following to answer questions: -(Table: Workers and Output) Look at the table Workers and Output. After graduation you achieve your dream of opening an art shop that specializes in selling mud statues. You pay $10 per day on a loan from your uncle, and regardless of how much you produce, you pay $10 per day to each of the workers who make the mud statues. The total cost of producing 25 statues is:

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 marginal cost of the fourth cake?

Farmers in the United States grow about three times as much wheat per acre as do farmers in Western Europe.

The long run is the period during which fixed costs do not change.

In the long run:

If marginal cost is less than average total cost, then _____ cost is _____.

A total product curve indicates the relationship between _____ when all other inputs are fixed.

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

The costs associated with variable inputs are _____, and the costs associated with _____ inputs are _____.

Use the following to answer questions: -(Table: Costs of Producing Bagels) Look at the table Cost of Producing Bagels. The total cost of producing 2 bagels 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 three mixers, her average total cost _____ in the range of output between 100 and 400 cakes.

Use the following to answer questions: -(Table: Production Function for Soybeans) Look at the table Production Function for Soybeans. Assume that the fixed input, capital, is 10 acres of land and a tractor, which have a combined cost of $150 per day. The cost of labor is $100 per worker per day. The total cost of producing 60 bushels of soybeans is:

When marginal cost is ABOVE average variable cost, average variable cost must be:

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.

Marginal cost can be calculated as:

In the short run: