Exam 7: Technology, Production and Costs

Figure 7-9 -Refer to Figure 7-9 above to solve the following problems. a.Calculate the fixed cost of production. b.Calculate the average total cost of production when the firm produces 20 units of output. c.Calculate the average variable cost of production when the firm produces 20 units of output. d.Calculate the average fixed cost of production when the firm produces 20 units of output. e.Calculate the average fixed cost of production when the firm produces 15 units of output. f.If the firm increases output from 15 to 20 units what is the marginal cost of output?

Which of the following can a firm do in the long run but not in the short run?

As a firm hires more labour in the short run,the

If marginal product is equal to average product,then total product is at a maximum.

Explain how the listed events (a-d)would affect the following at Hilton Hotels. i.Marginal cost ii.Average variable cost iii.Average fixed cost iv.Average total cost a.Hilton decides on an across-the-board 5 per cent increase in executive salaries. b.Hilton decides to eliminate all print advertising. c.Hilton signs a new contract with the Culinary Workers Union that requires the company to increase wages for all its kitchen workers. d.The federal government starts to levy a $5 room tax on all hotel rooms.

The processes a firm uses to turn inputs into outputs of goods and services is called

Average total cost is equal to

Figure 7-2 -Refer to Figure 7-2.The average product of labour declines after L₂ because

Which of the following describes how output changes in the short run? Because of specialisation and the division of labour,as more workers are hired

Which of the following is a reason why a firm would experience diseconomies of scale?

Higher isocost lines correspond to higher

Which of the following costs will not change as output changes?

As the level of output increases,what happens to the value of average fixed cost,and what happens to the difference between the value of average total cost and average variable cost?

Figure 7-1 -Refer to Figure 7-1.The marginal product of the 3rd worker is

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 marginal cost curve?

Which of the following are examples of a firm experiencing a positive technological change? a.A firm is able to reduce its inputs by 15 per cent and still produce the same level of output. b.A seminar attended by the firm's workers makes them more productive. c.A firm adds 5 per cent to its workforce and is able to maintain its initial level of output. d.A firm restructures its distribution system and is able to save on its shipping times. e.A firm rearranges its warehouse and finds that it can use fewer workers to maintain its productivity level.

The additional output a firm produces by hiring one more worker is called the marginal product of labour.

Figure 7-1 -Refer to Figure 7-1.Diminishing marginal productivity sets in after

In economics,technology only refers to the development of new products.

A firm has successfully adopted a positive technological change when