Exam 11: Output and Costs

-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?

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

-In the above table, between what two levels of output does one first observe the law of diminishing returns?

Average product of labor is equal to ________.

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 AVC curve

The long run is a time period in which

-Based on the above production data table for Ken's Pizza Parlor, we know that the average product of labor curve begins to decrease after hiring worker ________.

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 vertical distance between the total variable cost curve and the total cost curve ________ as output increases; the vertical distance between the average variable cost curve and the average total cost curve ________ as output increases.

The short run is a time frame in which

Pat's Catering finds that when it caters 20 meals a week, its total cost is $6,000. If Pat has total variable cost of $5,000, what is Pat's total fixed cost?

Total Product, Marginal Product, Average Product -In the above table, the marginal product of the second worker is

Total Product, Marginal Product, Average Product -In the above table, the marginal product of the fourth worker is

Which curve intersects the AVC curve at its minimum point?

Which of the following statements is CORRECT?

-The above (incomplete) table provides information about the relationships between output and various cost measures. The marginal cost per unit when increasing output from 14 to 17 units is

An example of a short-run fixed factor of production is

-The above table shows the total product schedule for the campus book store. If each employee is paid $6 per hour and there are no other variable costs, then at what level of books sold per hour does the marginal cost begin to increase?

-In the above figure, between 5 and 10 units per hour, the firm experiences

-Cindy's Sweaters' production function is shown in the above table. Cindy rents two knitting machines for $30 a day each and hires workers at a wage rate of $40 a day. What is the marginal cost of the 19th sweater?