Exam 11: Output and Costs

For the past 15 years the American public has wanted to buy big trucks. The Big Three automakers delivered, investing billions in plants that build gas guzzlers. Now, when customers walk into showrooms, gas mileage is on their mind. Retooling the industry will take years. Mike Quincy says the industry is "like a huge aircraft carrier. It doesn't stop on a dime. It doesn't turn on a dime." What does Mike mean?

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

In economics, the short run is the time frame in which the quantities of ________ and the long run is the period of time in which ________.

When the marginal product curve is downward sloping, the average product curve

A period of time in which the quantity of at least one factor of production used by a firm is fixed is called the

-The above figure shows the costs at Barney's Bagel Bakery. After 3000 bagels are produced each day, the ATC curve starts to slope upward because the

The change in total cost from producing another unit of output equals the

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

If a firm's marginal product of labor is less than its average product of labor, then an increase in the quantity of labor it employs definitely will

The vertical distance between a firm's average total cost curve, ATC, and its average variable cost curve, AVC

What is the difference between the short run and the long run?

One reason for diseconomies of scale is that, at very large scales, management systems can become

The short run is a period of time in which

The average product of labor is equal to the

The law of diminishing returns states that as

The law of diminishing returns states that as a firm increases

-In the above figure, an unattainable point is

Decent Donuts -Use the data in the above table and suppose that labor is the only variable factor of production. At what level of output does the marginal cost start to rise at Decent Donuts?

Jefferson's Cleaners -Based on the above table, what is the marginal product of the 6th worker hired at Jefferson's Cleaners?

Health care costs rose more than 10 percent in 2011, according to a survey of insurers by Aon Consulting Worldwide. Which of the following would be a variable cost in a hospital?