Exam 11: Behind the Supply Curve- Inputs and Costs

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 six bagels 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 marginal cost of the fifth cake?

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 50 units of produce,her total cost is:

When a firm has to increase its output,average total costs will decrease in the short run and then increase in the long run after the firm has time to add physical capital.

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 100 cakes per day,what is her average total cost?

If an increase in output results in a DECREASE in average total cost,the corresponding marginal cost is:

Use the following to answer questions : Table: Total Cost Data Quantity of Output Variable Cost ( VC) Total Cost ( ) 0 \ 0 \ 50 1 50 100 2 70 120 3 100 150 4 140 190 5 240 6 250 300 7 320 370 -(Table: Total Cost Data)Use Table: Total Cost Data.What is the fixed cost for this bicycle firm?

Use the following to answer questions : $\text {Table: Bonnie's Production Function for Good Z}$ $\text {The table describes Bonnie's production function for }$ $\text {Good Z. Assume labour is the only variable input that}$ $\text { Bonnie uses to produce Good Z.}$ Quantity of Quantity of Labour Hired Good Z Produced (workers) (per time period) 0 0 1 75 2 150 3 250 4 325 5 375 -(Table: Bonnie's Production Function for Good Z)Use Table: Bonnie's Production Function for Good Z.The marginal product of labour of the second worker is _____ units of good Z.

Use the following to answer questions : $\text {Table: Bonnie's Production Function for Good Z}$ $\text {The table describes Bonnie's production function for }$ $\text {Good Z. Assume labour is the only variable input that}$ $\text { Bonnie uses to produce Good Z.}$ Quantity of Quantity of Labour Hired Good Z Produced (workers) (per time period) 0 0 1 75 2 150 3 250 4 325 5 375 -(Table: Bonnie's Production Function for Good Z)Use Table: Bonnie's Production Function for Good Z.Suppose Bonnie spends $300 per month to rent the building,$100 per month on insurance,and $100 per worker per month.Given this information,Bonnie's monthly fixed costs equal:

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 400 cakes?

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 400 cakes per day,what is her average total cost?

A firm always operates at some point on its long-run average total cost curve in both the long run and the short run.

A factor of production whose quantity CANNOT be changed in the short run is a(n)_____ factor of production.

Use the following to answer questions : Table: Cost Data Quantity of Output Variable Cost ( ) Total Cost ( ) 0 0 50 1 50 100 2 70 120 3 100 150 4 140 190 5 190 240 6 250 300 7 320 370 -(Table: Cost Data)Use Table: Cost Data.The average total cost of producing four purses 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 total cost of four cakes?

The change in total output resulting from a one-unit increase in the quantity of an input used,holding the quantities of all other inputs constant,is:

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

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.

Diminishing marginal returns occur when:

Use the following to answer questions : -(Figure: Short-Run Costs)Use Figure: Short-Run Costs.The vertical difference between curve B and curve C at any quantity of output is the _____ cost.