Exam 22: The Firm: Cost and Output Determination

At Phil's Hot Dog Stand, we found the following: 4 laborers produced 66 hot dogs 5 laborers produced 76 hot dogs 6 laborers produced 84 hot dogs 7 laborers produced 88 hot dogs What was the marginal physical product of the seventh laborer?

-Refer to the above table. What does total product equal when 2 units of labor are used?

Which of the following is NOT a reason why a firm may experience economies of scale?

-Refer to the above figure. The curve reflects

Which of the following statements with respect to the figure below is INCORRECT?

The marginal cost curve always intersects the average total cost curve at the point at which the average total cost curve

"The long-run average cost curve is derived from adding all short-run average cost curves together." Do you agree or disagree? Explain.

-Refer to the above table. At what quantity of labor does the average variable cost curve start to increase?

When increasing its output results in falling costs, a firm that can adjust all inputs is experiencing

The lowest rate of output per unit of time at which long-run average costs for a firm are at a minimum defines

For a wheat farmer in the middle of harvesting system, a fixed input would be

"The short-run average total cost curve and the long-run average cost curve are both U-shaped for the same reasons." Do you agree or disagree? Why?

Explain how the long-run average cost curve is constructed graphically.

-Refer to the above table. When output rises from 2 units to 5 units, marginal costs are

An increase in long-run average costs resulting from increases in output is

A decrease in long-run average costs resulting from decreases in output is

-In the above table, the average physical product of 2 workers and the marginal physical product of the 2nd worker is

"In economics, the short run commonly refers to a period within one year and the long run is a period longer than one year." Do you agree or disagree? Explain your answer.

-Refer to the above table. What are total costs at an output of 3 units?

-In the above figure, if this firm produces output level Q₂, it has average variable costs of