Exam 22: The Firm: Cost and Output Determination

Suppose the total output curve increases at an increasing rate for workers 1-50, increases at a decreasing rate from workers 51-101, and decreases beyond 101 workers. We would know that

-If average variable costs are increasing while average total costs are decreasing, then

When average variable costs are rising

As a firm increases the level of output that it produces, short-run average fixed cost

Why might firms experience diseconomies of scale?

Diseconomies of scale occur

Which of the following is TRUE about the long run?

Marginal cost is equal to average variable cost

-Refer to the above table. When the quantity of labor equals 4, what does the average product equal?

Assume it takes 10 units of labor to produce 4 units of output. When the price of labor is $6 per unit and fixed costs equal $60, what is the total cost of those 4 units of output?

-In the above table, the marginal product of the sixth worker is

Suppose that a firm is currently producing 500 units of output. At this level of output, TVC = $10,000 and TFC = $25,000. What is the firms ATC?

-Refer to the above figure. Diseconomies of scale exist

A basic distinction between the long run and the short run is that

-In the above figure, the long-run cost curve between points E and F illustrates

Average fixed costs will

The relationship Q = f(K, L) is an example of a

Assume that in the short run a firm is producing 100 units of output, has average total costs of $100, and average fixed costs of $20. The firm's total variable cost at this output level is

-The distance between the TC and the TVC curve

-Refer to the above table. What is MC when output rises from 0 unit to 1 unit?