Exam 11: Output and Costs

-The above table gives some cost data for Peter's Pickles. Peter's fixed cost is $20. Average variable cost (AVC) is lowest when output is equal to

Marginal cost is equal to

Poppy Lipstick is a lipstick producer. A decrease in the rent paid by Poppy Lipstick

What are economies of scale? What is the main source of economies of scale?

All the production points that lie above the total product curve are inefficient.

When long-run average cost decreases as output increases there are definitely

When the total product curve is drawn in a figure that measures employment along the horizontal axis, it is a graph that shows the

The average product of labor is

Decent Donuts -Use the data in the table above and suppose that labor is the only variable factor of production. When 122 dozen donuts are produced at Decent Donuts, the MC curve

Over the range of output for which the marginal product of labor curve is negatively sloped, the marginal cost curve is negatively sloped.

-Suppose the local newspaper hires students to fold and bag newspapers for delivery and pays them $20 per shift. Five students can fold and bag 300 newspapers per shift. The fourth student added 50 newspapers to total output. The capital cost is fixed at $50 per shift. a) Is the newspaper operating in the long run or short run? Why? b) What is the average product of 5 students? c) Calculate the total fixed, total variable, and total costs of folding and bagging 300 newspapers. d) Calculate the average fixed, average variable, and average total costs of folding and bagging 300 newspapers. e) What is the marginal cost of one of the 50 newspapers folded and bagged by the fourth student?

-The above table shows the total product schedule for the campus book store. If employees are paid $12 per hour, assuming there are no other variable costs, then the average variable cost of selling books will reach its minimum at

Which of the following statements is CORRECT?

-In the above figure, economies of scale are present up to an output level of

Describe the relationship between the marginal and average products of labor as the employment of labor increases in the short run.

-Based on the cost data in the above table, the long-run average cost (LRAC) is lowest when output is

In the long run, total variable cost is zero.

-In the above figure, curve D slopes downward because

-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. With Plant 2, Silvio's average product per worker is highest if ________ workers per week are employed.

-In the above figure, between 20 and 25 units per hour, the firm experiences