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Exam 7: The Costs of Production

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Question 81

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The change in total output associated with one additional unit of input is the

A) Opportunity cost of the output.
B) Average productivity.
C) Marginal physical product.
D) Marginal cost.

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Question 82

Multiple Choice

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Which of the following is a factor of production for the Little Biscuit Bread Company?

A) Flour.
B) Bread.
C) Productivity.
D) Money.

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Question 83

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$\begin{array}{l}\begin{array} { | l | r | r | r | r | } \hline \text { Output (units per day) } & 0 & 10 & 20 & 30 \\\hline \text { Total cost (dollars per day) } & \$ 40 & \$ 54 & \$ 62 & \$ 80 \\\hline\end{array}\\\text { Table } 21.2\end{array}$ At 20 units of output in Table 21.2, the average variable cost is

If a firm could hire all the workers it wanted at a zero wage (i.e., the workers are volunteers) , the firm should hire

Marginal cost

In the long run, which of the following is likely to be a variable cost?

$\begin{array}{l}\begin{array} { | c | c | } \hline \text { Units of Labor } & \text { Units of Output } \\\hline 0 & 0 \\\hline 1 & 15 \\\hline 2 & 35 \\\hline 3 & 45 \\\hline 4 & 52 \\\hline\end{array}\\\text { Table 21.1 }\end{array}$ If workers are paid $10, what is the labor cost per unit of output in Table 21.1 when output is increased from 15 to 35 units of output?

If the marginal physical product (MPP) is falling, then the

$\begin{array}{l}\begin{array} { | c | c | } \hline \begin{array} { c } \text { Output } \\\text { (Units per Day) }\end{array} & \begin{array} { c } \text { Total Cost } \\\text { (Dollars per Day) }\end{array} \\\hline 0 & 16 \\\hline 1 & 30 \\\hline 2 & 42 \\\hline 3 & 58 \\\hline 4 & 78 \\\hline\end{array}\\\text { Table 21.4 }\end{array}$ For the output levels in Table 21.4, the minimum of the average total cost curve occurs at a production rate of

If the marginal cost curve is rising, which of the following must be true?

The sum of fixed cost and variable cost at any rate of output is

Which of the following is a long-run concept?

$\begin{array}{l}\begin{array} { | c | c | } \hline \text { Units of Labor } & \text { Units of Output } \\\hline 0 & 0 \\\hline 1 & 15 \\\hline 2 & 35 \\\hline 3 & 45 \\\hline 4 & 52 \\\hline\end{array}\\\text { Table 21.1 }\end{array}$ What is the marginal physical product of the second unit of labor in Table 21.1?

Economic cost

What is the total fixed cost in Figure 21.2?

Which of the following is the slope of the production function with respect to an input?

In the short run, when a firm produces zero output, variable cost equals