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Exam 13: The Costs of Production.

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Question 211

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According to the mathematical laws that govern the relationship between average total cost and marginal cost,where must these two curves intersect?

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The two curves will ...

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Question 212

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The difference between accounting profit and economic profit is

A) explicit costs.
B) implicit costs.
C) total revenue.
D) marginal product.

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Question 213

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Scenario 13-4 Suppose that Abdul opens a coffee shop. He receives a loan from a bank for $100,000. He withdraws $50,000 from his personal savings account. The interest rate on the loan is 8%, and the interest rate on his savings account is 2%. -Refer to Scenario 13-4.Abdul's implicit cost of capital is

Some costs do not vary with the quantity of output produced.Those costs are called

Scenario 13-16 A certain firm produces and sells staplers. Last year, it produced 7,000 staplers and sold each stapler for $6. In producing the 7,000 staplers, it incurred variable costs of $28,000 and a total cost of $45,000. -Refer to Scenario 13-16.The firm's fixed cost was

When marginal cost exceeds average total cost,

Profit equals total revenue minus total cost.

Cody builds mailboxes.If he charges $20 for each mailbox,his total revenue will be

Table 13-15 Consider the following table of long-run total cost for four different firms: -Refer to Table 13-13.Which firm has economies of scale and then diseconomies of scale as output increases from 1 to 7?

Table 13-2 -Refer to Table 13-2.What is the marginal product of the third worker?

Table 13-10 Eileen's Elegant Earrings produces pairs of earrings for its mail order catalogue business. Each pair is shipped in a separate box. She rents a small room for $150 a week in the downtown business district that serves as her factory. She can hire workers for $275 a week. There are no implicit costs. -Refer to Table 13-10.What is the marginal product of the second worker?

Profit is defined as

Scenario 13-14 If Farmer Brown plants no seeds on his farm, he gets no harvest. If he plants 1 bag of seeds, he gets 5 bushels of wheat. If he plants 2 bags, he gets 9 bushels. If he plants 3 bags, he gets 12 bushels. A bag of seeds costs $120, and seeds are his only cost. -Refer to Scenario 13-14.Farmer Brown's marginal cost of producing 9 units of output (using 2 bags of seed) is

Table 13-12 Betty's Bakery -Refer to Table 13-12.What is the marginal cost of the 8th cake at Betty's Bakery?

Marginal cost tells us the

Marginal cost equals

If a firm experiences constant returns to scale at all output levels,then its long-run average total cost curve would

Figure 13-9 The figure below depicts average total cost functions for a firm that produces automobiles. -Refer to Figure 13-9.At output levels greater than N,the firm experiences

When average total cost rises if a producer either increases or decreases production,then the firm is said to be operating at efficient scale.

How would a production function that exhibits decreasing marginal product affect the shape of the total cost curve? Explain or draw a graph.