Exam 11: Behind the Supply Curve: Inputs and Costs

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 70 bushels of soybeans is:

Scale is the size of a firm's operations.

Use the following to answer questions: -(Table: Cost Data) Look at the table Cost Data. The average fixed cost of producing 4 purses is:

If an increase in output results in a decrease in average total cost, the corresponding marginal cost 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 one mixer, her average fixed cost _____ in the range of output between 100 and 400 cakes.

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.

Use the following to answer questions: -(Table: Total Product and Marginal Product) Look at the table Total Product and Marginal Product. Negative marginal returns begin when the _____ worker is added.

When a firm adds capital, in the short run workers will be:

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 total cost?

Austin's total fixed cost at the bakery is $3,600 a month. Austin employs 20 workers and pays each worker $8 an hour. The marginal product of the twentieth worker is 12 iced cupcakes an hour. What is the marginal cost of the last cupcake produced by the last worker Austin hired?

If ATC is equal to MC, then the firm is operating:

Use the following to answer questions: Figure: The Average Total Cost Curve -(Figure: The Average Total Cost Curve) Look at the figure The Average Total Cost Curve. The total cost of producing 10 pairs of boots is approximately:

Tankao makes earbuds for mobile devices. When Tankao produces 20 sets of earbuds, its average variable cost is $5 per set and its average total cost is $8 per set. Tankao's:

Use the following to answer questions: -(Table: Costs of Producing Bagels) Look at the table Cost of Producing Bagels. The average total cost of producing 2 bagels is:

Economies of scale are often the result of increased specialization, which can occur when output levels increase.

Joan adds one more employee to her construction company. The additional output produced by this employee represents the average product of this employee.

A business produces 10 pairs of eyeglasses. It incurs $30 in average variable cost and $35 in average total cost. The total fixed cost of producing 10 pairs of eyeglasses is:

Use the following to answer questions: Figure: Long-Run Average Cost -(Figure: Long-Run Average Cost) Look at the figure Long-Run Average Cost. This firm has _____ in the output region from B to C.

The long-run average cost curve is tangent to a series of short-run average fixed cost curves.

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 200 cakes per day, what is her average fixed cost?