Exam 11: Behind the Supply Curve- Inputs and Costs

Use the following to answer questions : -(Figure: Long-Run Average Cost)Use Figure: Long-Run Average Cost.This firm has _____ in the output region from 0 to A.

When a firm adds physical capital,labour will become more productive in the short run.

Tankao makes Bluetooth headphones for mobile devices.When 50 Bluetooth headphones are produced in the short run,the average variable cost is $30.Fixed costs are greater than zero.Therefore,Tankao's average _____ cost is _____.

Assuming that all other factors of production are held constant,marginal product is the change in _____ output resulting from a one-unit change in _____.

Use the following to answer questions : $\text {Table: Lindsay's Farm}$ $\text {The table provides information about the production}$ $\text { function for Lindsay's Farm, which uses labour and land}$ $\text { to produce its produce. The price of labour is \$ 50 per}$ $\text {worker per week and the price of land is \$ 20 per hectare.}$ Quantity of Land (hectares) Quantity of Labour (workers) Quantity of Produce (bushels) 10 0 0 10 1 50 10 2 100 10 3 140 10 4 170 10 5 190 -(Table: Lindsay's Farm)Use Table: Lindsay's Farm.When Lindsay produces 140 units of produce,her total cost is:

A fixed input is one:

A factor of production whose quantity can be changed in the SHORT run is a(n)_____ factor of production.

Use the following to answer questions : -(Figure: Short-Run Costs II)Use Figure: Short-Run Costs II.At 6 units of output,the average variable cost is approximately:

As more labour is added to a fixed amount of capital,eventually the marginal product of labour decreases.

If your firm is operating in the negatively sloped portion of a long-run average total cost curve,then your production exhibits:

The long run is:

A business produces 10 pairs of eyeglasses.It incurs $30 in average variable cost and $35 in average total cost.The total fixed cost of producing 10 pairs of eyeglasses is:

Marginal cost _____ over the range of increasing marginal returns and _____ over the range of diminishing marginal returns.

A business produces 10 pairs of eyeglasses.It incurs $35 in average total cost and $5 in average fixed cost.The average variable cost of producing 10 pairs of eyeglasses is:

Use the following to answer questions : -(Figure: Long-Run and Short-Run Average Cost Curves)Use Figure: Long-Run and Short-Run Average Cost Curves.If a firm faced the long-run average total cost curve shown in the figure and it expected to produce 100 000 units of the good in the long run,the firm should build the plant associated with:

Use the following to answer questions : Table: Costs of Birthday Cakes Quantity of cakes Variable cost, 0 0 1 15 2 25 3 30 4 38 5 50 6 70 -(Table: Costs of Birthday Cakes)Use Table: Costs of Birthday Cakes.Assume that fixed costs are $10.What is the average variable cost of four cakes?

Krista's dry-cleaning business incurs $900 per month in fixed costs.Last month her total output was 3 000 kilograms of clothes.This month her total output fell to 2 700 kilograms.This means her average fixed cost _____ by a little more than _____ cents.

If a firm has to increase output suddenly to meet an increase in demand,its average total cost will increase in the short run until it has time to add physical capital.

In some complex production processes,such as nuclear power plants,some inputs have to be treated as being fixed even in the long run.

Diminishing returns to an input occur: