Exam 11: Behind the Supply Curve- Inputs and Costs

Use the following to answer questions : Table: Cakes Number of mixers Fixed Costs Average Variable Cost 1 \ 1,000 \ 10 2 1,500 7 3 2,500 4 -(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.How many mixers should Pat buy to get the lowest average total cost if she plans to make 100 cakes?

Buford Bus Manufacturing installs a new assembly line.As a result,the output per worker increases.The marginal cost of output at Buford:

Use the following to answer questions : Table: Workers and Output No. of Workers Output 1 10 2 25 3 35 4 43 5 48 -(Table: Workers and Output)Use Table: Workers and Output.After graduation,you achieve your dream of opening an art shop that specializes in selling mud statues.You pay $10 per day on a loan from your uncle,regardless of how much you produce.You also pay $10 per day to each of the workers who you hire to make the mud statues.The variable cost of producing 43 statues is:

Use the following to answer questions : Table: Production Function for Soybeans Quantity of Labour (workers) Quantity of Soybeans (bushels) 0 0 1 25 2 45 3 60 4 70 5 75 -(Table: Production Function for Soybeans)Use Table: Production Function for Soybeans.Assume that the fixed input,capital,is 10 hectares of land and a tractor,which have a combined cost of $150 per day.The cost of labour is $100 per worker per day.The fixed cost of producing 25 kilograms of soybeans is:

Use the following to answer questions : -(Figure: Short-Run Costs)Use Figure: Short-Run Costs.A is the _____ cost curve.

The long-run average cost curve is tangent to a series of short-run average fixed cost curves.

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 fixed cost of two cakes?

Marginal cost is the:

Diminishing returns are one explanation for diseconomies of scale.

Use the following to answer questions : Table: Cakes Number of mixers Fixed Costs Average Variable Cost 1 \ 1,000 \ 10 2 1,500 7 3 2,500 4 -(Table: Cakes)Use Table: Cakes.Pat is opening a bakery to make and sell special birthday cakes.She is trying to decide how many mixers to purchase.Her estimated fixed and average variable costs if she purchases 1,2,or 3 mixers are shown in the table.Assume that average variable costs do not vary with the quantity of output.If Pat purchases 3 mixers and bakes 400 cakes per day,what is her average total cost?

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 A to B.

Use the following to answer questions : Table: Costs of Producing Bagels Quantity of Bagels (per period) Total Variable Costs Total Fixed Costs 0 \ 0.00 \ 0.10 1 0.20 0.10 2 0.30 0.10 3 0.35 0.10 4 0.45 0.10 5 0.60 0.10 6 0.80 0.10 7 1.05 0.10 8 1.35 0.10 -(Table: Costs of Producing Bagels)Use Table: Costs of Producing Bagels.The marginal cost of producing the second bagel is:

Use the following to answer question 160: Table: Output and Marginal Cost Output Marginal Cost 1 15 2 10 3 5 4 8 5 12 6 20 -In the short run,as output gets larger:

A firm's marginal cost is the:

When a cherry orchard in British Colombia adds a worker,the total cost of production increases by $24 000.Adding the worker increases the total cherry output by 600 kilograms.Therefore,the marginal cost of the last kilogram of cherries produced is:

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 five cakes?

The eventual increase in AVC as output increases is the _____ effect.

Use the following to answer question 160: Table: Output and Marginal Cost Output Marginal Cost 1 15 2 10 3 5 4 8 5 12 6 20 -Cindy operates Birds-R-Us,a small store manufacturing and selling 100 bird feeders per month.Her monthly total fixed costs are $500,and her monthly total variable costs are $2 500.If for some reason Cindy's fixed cost fell to $400,then her _____ costs would _____.

The curve that illustrates the relationship between output and average total cost when the fixed cost has been chosen to minimize the average total cost for each level of output is the _____ curve.

Use the following to answer questions : Table: Costs of Producing Bagels Quantity of Bagels (per period) Total Variable Costs Total Fixed Costs 0 \ 0.00 \ 0.10 1 0.20 0.10 2 0.30 0.10 3 0.35 0.10 4 0.45 0.10 5 0.60 0.10 6 0.80 0.10 7 1.05 0.10 8 1.35 0.10 -(Table: Costs of Producing Bagels)Use Table: Costs of Producing Bagels.The average total cost of producing two bagels is: