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Exam 8: Technology, production, and Costs

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Question 71

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Figure 8-11 Figure 8-11 illustrates the long-run average cost curve for a firm that produces picture frames.The graph also includes short-run average cost curves for three firm sizes: ATCₐ, ATCb and ATCc. -Refer to Figure 8-11.If the firm chooses to produce and sell 25,000 frames per month by operating in the short run with a scale operation represented by ATCc

A) the firm will not be operating efficiently.
B) the firm will be operating efficiently.
C) the firm would lower its average costs by reducing its scale of operation.
D) the firm will not be able to earn a profit.

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

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Question 72

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The marginal product of labor is defined as

A) the change in total revenue that results when an additional unit of a labor is hired.
B) the additional labor required to produce one more unit of output.
C) the additional labor cost of producing one more unit of output.
D) the change in output that a firm produces as a result of hiring one more worker.

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

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Question 73

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Figure 8-11 Figure 8-11 illustrates the long-run average cost curve for a firm that produces picture frames.The graph also includes short-run average cost curves for three firm sizes: ATCₐ, ATCb and ATCc. -Refer to Figure 8-11.For output rates greater than 20,000 picture frames per month

State the law of diminishing marginal returns.

When a firm produces more output using the same inputs or the same output using fewer inputs we say that the firm

In economics,technology only refers to the development of new products.

Describe how Wal-Mart has used positive technological change to manage its inventory.

The production function shows

Figure 8-6 Figure 8-6 contains information about the short run cost structure of a firm. -Refer to Figure 8-6.In the figure above which letter represents the average total cost curve?

Table 8-4 $\begin{array} { | c | c | c | } \hline \begin{array} { c } \text { Labor } \\\text { (hours) }\end{array} & \begin{array} { c } \text { Quantity of } \\\text { Fish (pounds) }\end{array} & \begin{array} { c } \text { Marginal } \\\text { Product } \\\text { (pounds) }\end{array} \\\hline 1 & 10 & \\\hline 2 & 18 & \\\hline 3 & 24 & \\\hline 4 & 28 & \\\hline 5 & 30 & \\\hline 6 & 32 & \\\hline\end{array}$ -Refer to Table 8-4.The table above shows the following relationship between hours spent fishing and the quantity of fish caught for Juan,a commercial fisherman.

The relationship between the inputs employed by a firm and the maximum output that it can produce with those inputs is the firm's

If,after hiring the 6th worker,a firm's output falls,then the marginal product of the 6th worker is negative.

Explain how the listed events (a-d)would affect the following at Hilton Hotels. i.Marginal cost ii.Average variable cost iii.Average fixed cost iv.Average total cost a.Hilton decides on an across-the-board 5 percent increase in executive salaries. b.Hilton decides to eliminate all print advertising. c.Hilton signs a new contract with the Culinary Workers Union that requires the company to increase wages for all its kitchen workers. d.The federal government starts to levy a $5 room tax on all hotel rooms.

If 11 workers can produce a total of 54 units of a product and a 12th worker has a marginal product of 6 units,then the average product of 12 workers is

Who was the economist who first analyzed the advantages of specialization and the division of labor?

Describe the difference between technology and positive technological change.

The marginal cost curve is U-shaped because of the law of increasing opportunity costs.

The marginal product of labor is defined as

What is the difference between explicit costs and implicit costs? List three examples each of explicit costs and implicit costs that may be experienced by a small business.

Figure 8-1 -Refer to Figure 8-1.Diminishing marginal productivity sets in after