Exam 11: Output and Costs

When the marginal and average products of labor are equal to each other, the

-Sandra's Sweaters' production function is shown in the above table. Sandra rents three knitting machines for $30 a day each and hires workers at a wage rate of $40 a day. If the rental rate of capital rises to $50 per machine a day, Sandra's ________ curve shifts upward.

Minneapolis business Rogue Chocolatier sells specialty chocolate bars with a high cocoa content. The price of cocoa beans shot up 44 percent in 2008. How did this affect Rogue's short run costs?

-Silvio's Pizza is a small pizzeria. The firm's production function is shown in the table above. Suppose that Silvio's costs include only the cost of renting ovens, which is $100 per oven per week, the labor cost, $280 per worker per week, and the opportunity cost of Silvio's entrepreneurship, $1,000 per week. Suppose Silvio's uses Plant 2 and hires 4 workers. What is the firm's average total cost?

The law of diminishing returns implies that, with the quantity of capital fixed, as the use of labor rises

-The average total cost curves for plants A, B, C and D are shown in the above figure. Which plant is best to use to produce 60 units per day?

A firm increases both its plant and its labor force by the same percentage and its average total costs remain unchanged. Is the firm experiencing increasing returns to scale, constant returns to scale, or decreasing returns to scale?

-The above table gives some production and cost information for Flaming Fernando's, a restaurant that sells Fiery Frijoles. What is the average total cost of producing 4,500 frijoles?

-The above table gives some of the costs of the Delicious Pie Company. What is the average variable cost of producing 300 pies?

-Silvio's Pizza is a small pizzeria. The firm's production function is shown in the table above. Suppose that Silvio's costs include only the cost of renting ovens, which is $100 per oven per week, the labor cost, $280 per worker per week, and the opportunity cost of Silvio's entrepreneurship, $1,000 per week. Suppose Silvio's kitchen currently has enough room for only one oven. If Silvio employs 3 workers, producing 200 pizzas per week is ________ in the short run and ________ in the long run.

Diminishing marginal returns occurs when

-The above table shows the short-run total product schedule for the campus book store. At what levels of books sold per hour will the marginal product of labor be greater than the average product of labor?

Marginal cost is the increase in total ________ that results from a one-unit increase in ________.

A firm is operating in its range of economies of scale and is on both its LRAC curve and its short-run ATC curve. At that level of output, the slope of its LRAC curve is

As output increases, marginal cost will eventually

Which type of cost is does NOT change as the quantity of output produced changes?

A farmer discovers that the total cost of growing 50 acres of eggplant is $50,000 and that the total cost of growing 51 acres of eggplant is $52,000. The marginal cost of the 51st acre of eggplant is

-The above table shows the short-run total product schedule for the campus book store. When the fifth employee is hired, the marginal product is ________ and is ________ the average product.

When the marginal product curve is above the average product curve, ________ as output increases.

When long-run average costs increase as output increases, there are