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.If Pat purchases 3 mixers,her average total cost _____ in the range of output between 100 and 400 cakes.

You own a deli.Which decision is most likely to be made in the LONG run at your deli?

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 total cost of producing 25 statues is:

When diseconomies of scale occur:

As a firm increases production in the short run,the marginal cost of output increases because the marginal product of the variable input decreases.

The rent for Oscar's sporting goods store is $2 500 per month.Oscar pays his staff $9 per hour,and his monthly electricity bill averages $700,depending on his total hours of operation.Oscar's fixed costs of production equal:

Marginal cost is the change in:

The sum of fixed and variable costs is _____ cost.

If ATC is equal to MC,then the firm is operating:

In the short run,if marginal cost is higher than average total cost,producing an extra unit of output must raise average total cost.

When a firm has diminishing marginal returns:

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 2 mixers and bakes 200 cakes per day,what is her average total cost?

In economics,the short run is defined as:

If output increases,a firm will move along its short-run average total cost curve in the short run until it has time to adjust its fixed cost.

In economics,the short run is:

Use the following to answer questions : Table: Production of Cabinets Quantity of Labour (workers) Quantity of Cabinets Marginal Product of Labour (units per period) 0 0 1 5 5 2 11 6 3 16 5 4 20 4 5 23 3 6 25 2 7 26 1 8 25 -1 -(Table: Production of Cabinets)Use Table: The Production of Cabinets.If each cabinetmaker could be hired at no cost,how many workers would your firm employ?

The slope of a long-run average total cost curve exhibiting decreasing returns to scale is: