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Exam 11: Behind the Supply Curve: Inputs and Costs

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Question 61

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Use the following to answer question: -(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 variable cost of producing 48 statues is:

A) $50.
B) $48.
C) $20.
D) $10.

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

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Question 62

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A firm that has lower costs per unit as it increases production in the long run has:

A) increasing returns to scale.
B) decreasing returns to scale.
C) increasing opportunity costs.
D) scale reduction.

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

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Question 63

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The -shape of the long-run average total cost curve is primarily due to:

In the long run,some of a firm's costs are fixed,while others are variable.

Once diminishing returns have set in,as output increases,the total cost curve:

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

Austin's total fixed cost is $3,600 a month for making 100,000 cupcakes at his cupcake bakery.Austin employs 20 workers and pays each worker $600 a month.If labor is his only variable cost,what is Austin's total cost per month for making 100,000 cupcakes?

(Table: Bonnie's Production Function for Good Z) Use Table: Bonnie's Production Function for Good Z.The costs that vary with Bonnie's level of production are her:

The long-run average total cost curve shows the relationship between output and the average total cost when variable cost has been chosen to minimize average total cost for each level of output.

Use the following to answer question: -(Table: Cost Data) Use Table: Cost Data.When the purse factory produces 5 units of output (purses) :

Use the following to answer question: -(Figure: Short-Run Costs II) Use Figure: Short-Run Costs II.Curve 1 is the _____ cost curve.

The long-run average total cost curve shows the relationship between output and the average total cost when fixed cost has been chosen to minimize average total cost for each level of output.

The _____ cost curve is NOT affected by diminishing returns.

Use the following to answer question: -(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 1 mixer and bakes 200 cakes per day,what is her average fixed cost?

Use the following to answer question: -(Figure: The Total Product) Use Figure: The Total Product.Between points A and B the marginal product of labor is:

Use the following to answer question: -(Figure: Short-Run Costs) Use Figure: Short-Run Costs.B is the _____ cost curve.

Diminishing returns are a reason that:

The _____ curve shows the absolute quantities of output that can be obtained from different quantities of a variable input,assuming other inputs are fixed.

Lauren has 11 people working in her tangerine grove.The marginal product of the eleventh worker is 13 bushels of tangerines.If she hires a twelfth worker,the marginal product of that worker will be _____ bushels.

If two firms are identical in all respects except that one has more of the fixed input capital than another,the marginal product curve for the firm with more capital: