Exam 11: Technology, Production, and Costs

Is it possible for technological change to be negative? If so, give an example.

Assume that you observe the long-run average cost curve of ACME Bookstores, a national chain. Starting from the point on the curve where output is zero and moving to the right which of the following lists the behavior of long-run average costs in the correct sequence (that is, which will be observed first, second, etc.)?

If the marginal cost curve is below the average variable cost curve, then

If 11 workers can produce 53 units of output while 12 workers can produce 56 units of output, what is the marginal product of the 12th worker?

Figure 11-18 -Refer to Figure 11-18. Starting from point d a movement along isoquant1 to point f

When a firm experiences a positive technological change,

Figure 11-18 -Refer to Figure 11-18. Starting from point e, a movement along the isocost to point f

If a firm decreases its plant size and finds that its long-run average costs have decreased, then

The ABC Company manufactures routers that are used to provide high-speed Internet service. ABC sells an average of 1,000 routers each month, but to exhaust economies of scale in its industry ABC would have to sell 3,000 routers each month. Therefore,

Table 11-9 -Refer to Table 11-9. Clock It To Me manufactures clock radios. The table above shows estimates of fixed cost per period and average variable cost for three possible plant sizes. a. You are employed as the company's cost accountant and have been asked to prepare cost estimates for various output levels for each of the three possible plant sizes. Record your calculations in the table below. Average Cost of Production b. For each of the three output levels, which plant size will generate the lowest average total cost of production? c. Suppose the firm currently sells 8,000 clock radios per period (using the optimal plant size for this output level). Now, however, it has just secured a long-term contract to supply 20,000 clock radios per period. In the short run, what is the average total cost of producing 20,000 clock radios? Provide a numerical value based on your answer in part a. d. What happens to average total cost of production in the long run? Provide a numerical value based on your answer in part a.

Marginal cost is calculated for a particular increase in output by

If a firm is experiencing diseconomies of scale, its long-run average cost curve is increasing.

If marginal product is greater than average product, then

Figure 11-12 -Refer to Figure 11-12. Which of the following statements about the input combinations shown in the diagram is false?

Who was the economist who first analyzed the advantages of specialization and the division of labor?

Use a long-run average cost curve graph to illustrate how diseconomies of scale would not make it beneficial for two companies to go through with a merger.

The explicit cost of production is also called

Figure 11-6 Figure 11-6 contains information about the short-run cost structure of a firm. -Refer to Figure 11-6. In the figure above, which letter represents the marginal cost curve?

Which of the following equations is correct?

Figure 11-10 -Refer to Figure 11-10. Identify the minimum efficient scale of production.