Exam 11: Output and Costs

Total product is

Are the short-run average total cost curve and the long-run average cost both U-shaped for the same reasons? If so, carefully explain these reasons. If not, explain why each curve is U-shaped.

Decent Donuts -Based on the data in the table above, when Decent Donuts hires eight workers, the

A firm's total variable cost (TVC) is defined as a cost that

Which of the following statements regarding the marginal product curve is FALSE?

"Marginal cost eventually increases because of the law of diminishing returns." True or false? Explain.

-The above table gives some of the costs of the Delicious Pie Company. What is the total fixed cost of producing 100 pies?

-In the above figure, the marginal cost curve is curve

Downsizing is the practice of laying off workers in an attempt to decrease average total cost. Can laying off workers decrease average total cost? Is it possible for the firm to downsize and have its average total cost increase? Explain your answer.

-The table above gives production information for Bob's Baseball Cap Company. Bob's total cost when zero caps are produced is $200 and workers cost $10 per hour. The average fixed cost of producing 25 baseball hats per hour is

A common source of diseconomies of scale is the

-Ajax Manufacturing has a fixed scale of plant with the levels of total product given in the table for different levels of labor. Complete the table by calculating the average product and marginal product.

Output (pizzas per day) -Tony's Pizza's production function is shown in the table above. Tony hires workers at a wage rate of $50 a day and his total fixed cost is $100 for Plant 1 and $150 for Plant 2. a) Calculate Tony's Pizza's average total costs for Plant 1. Draw the short-run average total cost curve. b) Calculate average total costs for Plant 2. Draw the short-run average total cost curve on the same figure that you used for part a. c) In the figure, illustrate Tony's long-run average cost curve. d) If Tony wants to produce 34 pizzas per day, what plant size should he choose? Over what output range is it efficient to operate Plant 1?

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

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

"Diminishing marginal returns" refer to a situation in which the

The marginal product of labor is the change in total product from a one-unit increase in

-The above table shows the short-run total product schedule for the campus book store. With which employee do diminishing marginal returns set in?

-In the above figure, which of the following statements is FALSE?

-In the above figure, which of the following statements is FALSE?