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Exam 13: The Costs of Production

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Question 141

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Figure 13-5 -Refer to Figure 13-5.Curve C represents which type of cost curve?

A) marginal cost
B) average total cost
C) average variable cost
D) average fixed cost

E) A) and B)
F) None of the above

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Question 142

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Table 13-12 Betty's Bakery -Refer to Table 13-12.What is the marginal cost of the 2nd cake at Betty's Bakery?

A) $14
B) $15
C) $28
D) $34

E) B) and D)
F) B) and C)

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Question 143

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

Figure 13-5 -Refer to Figure 13-5.Curve A represents which type of cost curve?

Suppose that a firm has only one variable input,labor,and firm output is zero when labor is zero.When the firm hires 6 workers the firm produces 90 units of output.Fixed costs of production are $6 and the variable cost per unit of labor is $10.The marginal product of the seventh unit of labor is 4.Given this information,what is the average total cost of production when the firm hires 7 workers?

The shape of the total-cost curve is inversely related to the shape of the production function.

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?

In his book,An Inquiry into the Nature and Causes of the Wealth of Nations,Adam Smith credits economies of scale to

Figure 13-9 The figure below depicts average total cost functions for a firm that produces automobiles. -Refer to Figure 13-9.The firm experiences economies of scale at which output levels?

Figure 13-10 -Refer to Figure 13-10.The firm experiences constant returns to scale if it changes its level of output from

Figure 13-5 -Refer to Figure 13-5.Which curve is most likely to represent marginal cost?

Table 13-12 Betty's Bakery -Refer to Table 13-12.What is the average total cost of producing 2 cakes at Betty's Bakery?

The shape of the total-cost curve is unrelated to the shape of the production function.

Suppose a firm currently produces 225 units of output per day with 15 workers.The firm is able to produce 235 units of output with a 16th worker.What is the marginal product of the 16th worker?

Describe the difference between the short run and the long run.

The amount of money that a firm pays to buy inputs is called

The total cost to the firm of producing zero units of output is

Which of the following expressions is correct?

Suppose that a firm has only one variable input,labor,and firm output is zero when labor is zero.When the firm hires 6 workers the firm produces 90 units of output.Fixed costs of production are $6 and the variable cost per unit of labor is $10.The marginal product of the seventh unit of labor is 4.Given this information,what is the average variable cost of production when the firm hires 7 workers?

Table 13-12 Betty's Bakery -Refer to Table 13-12.What is the fixed cost of production at Betty's Bakery?