Exam 7: Technology, Production and Costs

Figure 7-14 -Refer to Figure 7-14.Suppose Hilda hires labour at $8 per hour and capital costs $10 per unit.What is the minimum cost of producing 200 gooseberry pies?

The division of labour and specialisation explain

The slope of an isoquant is equal to the ratio of the price of the input on the horizontal axis divided by the price of the input on the vertical axis,multiplied by -1.

An explicit cost is defined as

Average fixed cost can be calculated using any of the formulas below except

Which of the following is typically considered a fixed cost by academic book publishers but a variable cost by companies that print books?

An important reason why diseconomies of scale arise is because firms may have to hire lower-skilled workers as firms expand.

The level of output at which all economies of scale have been exhausted is known as

The marginal product of labour is calculated using the formula

Figure 7-7 Figure 7-7 shows the cost structure for a firm. -Refer to Figure 7-7.When output level is 100,what is the total cost of production?

Use the following graph to answer the following questions. a.If the wage rate and the rental price of machines are both $50 and total cost is $800,is the cost-minimising point A,B,or C? b.If the wage rate is $40,the rental price of equipment is $120,and total cost is $1200,is the cost-minimising point A,B,or C? c.If the wage rate is $60,the rental price of equipment is $90,and total cost is $1800,is the cost-minimising point A,B,or C?

The slope of a typical isoquant is negative because to produce a given output,a producer

In the long run,the relevant cost is total cost.

Stan owns a software design business.He obtained a bank loan to buy computer equipment for his business.He pays $1000 per month for interest on the loan.He has 10 employees,each of whom is paid $4000 per month.Because his business has been successful,next month he will increase employee wages to $5000.If the revenue from his business remains at its current level,Stan is considering an addition to his office.Which of the following statements regarding Stan's business is false?

Jill Johnson owns a pizzeria.She currently produces 10 000 pizzas per month at a total cost of $500.If she produced one more pizza her total cost rises to $500.11.What does this tell us about Jill's marginal cost of producing pizzas?

In the long run

Stan owns a software design business.He does not have time to expand his office space or redesign the layout of his office.He can increase the amount of work he does by working more hours,asking his current employees to work more hours,or hiring more employees.The relationship between Stan's inputs and the maximum output his firm can produce is called his

In the short run,changes in output can only be brought about by a change in the quantity of variable inputs.

Figure 7-6 Figure 7-6 contains information about the short-run cost structure of a firm. -Refer to Figure 7-6.In the figure above,which letter represents the average variable cost curve?

Table 7-7 Table 7-7 shows cost data for Lotus Lanterns,a producer of whimsical night lights. -Refer to Table 7-7.What is the variable cost of production when the firm produces 115 lanterns?