Production Function and Total Costs

Front

What relationship does this graph show?

Back

diminishing marginal returns in production

Front

What is the marginal product per week of the sixth worker at Locotek, which produces toy trains and pays each worker $350 per week?

Back

5 trains

Front

In microeconomics, the short run is defined as which of the following? A period that is less than one year, A period that is between one year and four years, A period that is too short for a firm to be able to change its level of output, A period during which some inputs in a firm’s production process cannot be changed, A period during which a firm’s fixed costs exceed its variable costs

Back

A period during which some inputs in a firm’s production process cannot be changed

Front

As its output increases, a firm’s short-run marginal cost will eventually increase because of

Back

diminishing returns

Front

Which of the following statements regarding accounting profits, opportunity costs, and economic profits is true? Options: With positive opportunity costs, a firm can never earn economic profits. Accounting profits are equal to economic profits minus opportunity costs. If accounting profits are less than opportunity costs, there will be economic losses. Economic profits must always be greater than accounting profits. When economic profits are positive, accounting profits may be positive or negative.

Back

If accounting profits are less than opportunity costs, there will be economic losses.

Front

Assume Nadia voluntarily leaves a job with a salary of $100 per day to open and run a restaurant instead. After deducting all explicit costs from the restaurant revenues, Nadia has a gain of $120. Assuming there are no additional implicit costs, which of the following statements is true?

Back

Nadia has an economic profit of $20

Front

Ryan quit a job with a daily salary and opened a business. On a daily basis, the total revenue of the business is $200, and the explicit costs of the business are $120. If Ryan has zero economic profits, what must be the value of Ryan’s implicit costs?

Back

$80

Front

What is the total fixed cost at 3 units of output?

Back

$20

Front

If the cost of a unit of labor is $20 and total fixed cost is $100, what is the total cost of producing 20 units of output?

Back

$140

Front

What is the total variable cost of the first unit of output?

Back

$7