Exam 13: The Costs of Production.

Suppose that a firm has only one variable input,labor,and firm output is zero when labor is zero.When the firm hires 6 workers it produces 90 units of output.Fixed cost of production are $6 and the variable cost per unit of labor is $10.The marginal product of the seventh unit of labor is 4.Given this information,what is the total cost of production when the firm hires 7 workers?

Suppose Jan started up a small lemonade stand business last month.Variable costs for Jan's lemonade stand now include the cost of

As Bubba's Bubble Gum Company adds workers while using the same amount of machinery,some workers may be underutilized because they have little work to do while waiting in line to use the machinery.When this occurs,Bubba's Bubble Gum Company encounters

Which field of economics studies how the number of firms affects the prices in a market and the efficiency of market outcomes?

Economies of scale often arise because higher production levels allow specialization among workers.

Figure 13-5 -Refer to Figure 13-5.Curve D is increasing because

When a firm experiences constant returns to scale,

Figure 13-6 -Refer to Figure 13-6.Why doesn't the total cost curve begin at the origin (the point 0,0)?

Table 13-4 Charles's Math Tutoring -Refer to Table 13-4.What is the marginal product of the third worker?

Which of these assumptions is often realistic for a firm in the short run?

Scenario 13-6 Tony is a wheat farmer, but he also spends part of his day teaching guitar lessons. Due to the popularity of his local country western band, Farmer Tony has more students requesting lessons than he has time for if he is to also maintain his farming business. Farmer Tony charges $25 an hour for his guitar lessons. One spring day, he spends 10 hours in his fields planting $130 worth of seeds on his farm. He expects that the seeds he planted will yield $300 worth of wheat. -Refer to Scenario 13-6.Tony's economic profit equals

An example of an explicit cost of production would be the

Figure 13-3 -Refer to Figure 13-3.Which of the following statements best captures the nature of the underlying production function (not pictured)?

Table 13-6 Wooden Chair Factory -Refer to Table 13-6.Assume the Wooden Chair Factory currently employs 5 workers.What is the marginal product of labor when the factory adds a 6th worker?

Table 13-12 Betty's Bakery -Refer to Table 13-12.What is the average fixed cost of producing 3 cakes at Betty's Bakery?

Walter used to work as a high school teacher for $40,000 per year but quit in order to start his own painting business.To invest in his painting business,he withdrew $20,000 from his savings,which paid 3 percent interest,and borrowed $30,000 from his uncle,whom he pays 3 percent interest per year.Last year Walter paid $25,000 for supplies and had revenue of $60,000.Walter asked Tyler the accountant and Greg the economist to calculate his painting business's costs.

The difference between economic profit and accounting profit is that economic profit is calculated based on both implicit and explicit costs whereas accounting profit is calculated based on explicit costs only.

The most likely explanation for economies of scale is

When a firm is experiencing diseconomies of scale,long-run

Table 13-3 -Refer to Table 13-3.The marginal product of the second worker is