Economics and Figure Essay Example

Economics and Figure Paper |1. |The total product curve: | |B) |will become flatter as output increases, if there are diminishing returns to the variable input. | Use the following to answer questions 2-3: [pic] |2. |(Table: Total Product and Marginal Product) The marginal product of the second worker is: | |C) |20. | |3. |(Table: Total Product and Marginal Product) The average product of the fourth worker is ________ units. | |B) |22. | Use the following to answer question 4: Figure: Total Product [pic] |4. |(Figure: Total Product) As units of labor are hired between quantities L1 and L2, ________ is ________ and ________ is ________. | |A) |total product; rising; marginal product; positive | [pic] |1. |(Table: Output and Costs) Using the information in the table, when quantity equals three, average total cost equals: | |D) |17. | |2. Cindy operates Birds-R-Us, a small store manufacturing and selling 100 bird feeders per month. Cindys monthly total fixed costs| | |are $500, and her monthly total variable c osts are $2,500. If for some reason Cindys fixed cost fell to $400, then her: | |B) |average total costs would decrease. | |3. |Rebecca knows that Becca Furnitures marginal cost curve is above the average total cost curve. This means Becca Furnitures | | |average total cost curve: | |A) |must be rising. Use the following to answer question 4: Figure: Short-Run Costs II [pic] |4. |(Figure: Short-Run Costs II) At six units of output, average total cost is approximately: | |C) |$170. | Use the following to answer questions 1-2: Figure: Cost Curves [pic] |1. |(Figure: Cost Curves) If a firm faced a long-run average total cost curve as shown in the figure, and it expected to produce | | |100,000 units of the good in the long run, the firm should build the plant associated with: | |B) |ATC2. |2. |(Figure: Cost Curves) If a firm currently was producing at point C on the ATC2 in the figure but anticipates increasing output | | |to 225,000 units in the long run, the firm will build a _______ _ plant and experience ________. | |D) |larger; diseconomies of scale | |3. |A manufacturing company that benefits from lower costs per unit as it grows is an example of a firm experiencing: | |A) |increasing returns to scale. |1. |A decrease in demand and a decrease in supply will lead to a(n) ________ in equilibrium quantity and a(n) ________ in | | |equilibrium price. | |A) |decrease; indeterminate change | Figure: Average Total Cost Curve [pic] |10. |(Figure: Average Total Cost Curve) In the figure, the total cost of producing five pairs of boots is approximately: | |A) |$408. | Figure: A Perfectly Competitive Firm in the Short Run pic] |17. |(Figure: A Perfectly Competitive Firm in the Short Run) The firm will shut down in the short run if the price falls below: | |D) |P. | |18. |(Figure: A Perfectly Competitive Firm in the Short Run) The firms total revenue from the sale of its most profitable level of | | |output is: | |A) |0GLD. | Use the following to answer question 20: [ pic] |20. (Table: Marginal Benefit, Cost, and Consumer Surplus) The table shows six consumers willingness to pay (his or her individual | | |marginal benefit) for one iTunes download of a Jack Johnson song. If the marginal social cost is constant at $0, then the | | |efficient price is ________ and consumer surplus would be ________. | |A) |$0; $37 | Figure: The Restaurant Market [pic] |25. |(Figure: The Restaurant Market) The figure shows curves facing a typical restaurant in a community. Assume that many firms, | | |differentiated products, and easy entry and easy exit characterize the market. If the restaurant shown here is typical of others| | |in the community, then in the long run, we would expect to observe: | |B) |new restaurants entering the market. | |26. |The kinked demand curve model assumes that: | |B) |rivals will follow a price decrease but not a price increase. | Next exam 11/16 |1. Suppose that the market for haircuts in a community is perfectly competitive and that the market is initially in long-run | | |equilibrium. Subsequently, an increase in population increases the demand for haircuts. In the short run, we expect that the | | |market price will ________ and the output of a typical firm will ________. | |A) |rise; rise | Use the following to answer questions 2: Figure: Profit Maximizing [pic] |2. |(Figure: Profit Maximizing) The figure shows cost curves for a firm operating in a perfectly competitive market. We will write a custom essay sample on Economics and Figure specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Economics and Figure specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Economics and Figure specifically for you FOR ONLY $16.38 $13.9/page Hire Writer If the market | | |price is P4, the firm will produce quantity ________ and ________ in the short run. | |B) |q3; make a profit | |3. |In the perfectly competitive guidebook industry, the market price is $35. A firm is currently producing 10,000 guidebooks; | |(Figure: Profit Maximizing) The figure shows cost curves for a firm operating in a perfectly competitive market. If the market | | |average total cost is $38, marginal cost is $30, and average variable cost is $30. The firm should: | |price is P3, the firm will produce quantity ________ and ________ in the short run. | | | | | |C) | |produce more guidebooks, because the next guidebook produced increases profit by $5. | | | |4. |Consider the following data for a perfectly competitive firm: price is $9, output is 30 units, and average total cost is $7. The| | |firms profits are equal to: | |A) |$60. | |5. |A perfectly competitive firms marginal cost curve above the average variable cost curve is its: | |B) |short-run supply curve. Use the following to answer question 6: [pic] |6. |(Table: Variable Costs for Lots) During the winter, Alexa runs a snow-clearing service, and snow-clearing is a perfectly | | |competitive industry. Her only fixed cost is $1,000 for a tractor. Her variable costs per cleared lot, shown in the table, | | |include fuel and hot coffee. What is Alexas shut-down price in the short run? | |B) |$15 | |1. |The city bus system charges lower fares to senior citizens than to other passengers. Assuming that this pricing strategy | | |increases the profits of the bus system, we can conclude that senior citizens must have a ________ for bus service than other | | |passengers. | |C) |more elastic demand | |2. |Kaile Cakes is currently producing 10 cakes per day. The marginal cost of the tenth cake is $24, and average total cost of 10 | | |cakes is $6. The average total cost of 9 cakes is: | |A) |$4. | |3. |Many furniture stores run â€Å"Going out of Business† sales but never go out of business. In order for the shut-down decision to be | | |the appropriate one, the price of furniture must be ________ than the ________ average variable cost. | |B) |lower; minimum | Use the following to answer question 4: Figure and Table: Variable, Fixed, and Total Costs [pic] [pic] |4. |(Figure and Table: Variable, Fixed, and Total Costs) In the figure, the marginal cost of increasing production from 19 to 36 | | |bushels of wheat is: | |B) |$11. 76. | Use the following to answer question 5: [pic] |5. |(Table: Demand for Lennys Coffee) Lennys Cafe is the only source of coffee for hundreds of miles in any direction. The demand | | |schedule for Lennys coffee is given by the table. If Lennys marginal cost of selling coffee is a constant $2, his | | |profit-maximizing level of output is ________ cups at a price of ________ per cup. | |A) |four; $6 | |6. |At 76 units of labor, a firm finds that average product of labor equals 39. 6 and marginal product of labor equals 42. 9. We can | | |conclude that the average product curve at 76 units of labor is: | |A) |upward-sloping. | 7. |The slope of a long-run average total cost curve exhibiting diseconomies of scale is: | |C) |positive. | Use the following to answer question 8: Figure: Revenues, Costs, and Profits III [pic] |8. |(Figure: Revenues, Costs, and Profits III) In the figure, if the market price is $8, the profit-maximizing quantity of output | | |is: | |A) |0. | |9. One government policy for dealing with a natural monopoly is to: | |B) |impose a price ceiling to eliminate any economic profit. | Figure: Revenues, Costs, and Profits [pic] |10. |(Figure: Revenues, Costs, and Profits) At the profit-maximizing qu antity of output in the figure, total revenue is $________, | | |total cost is $________, and profit is $________. | |B) |90; 70; 20 | |1. |A farm can produce 1,000 bushels of wheat per year with two workers and 1,300 bushels of wheat per year with four workers. The | | |marginal product of the fourth worker is: | |D) |150 bushels. | |2. |Suppose that the market for candy canes operates under conditions of perfect competition, that it is initially in long-run | | |equilibrium, and that the price of each candy cane is $0. 10. Now suppose that the price of sugar rises, increasing the marginal | | |and average total cost of producing candy canes by $0. 05; there are no other changes in production costs. Based on the | | |information given, we can conclude that in the long run we will observe: | |A) |firms leaving the industry. | Use the following to answer question 3: [pic] |3. |(Table: Production of Cabinets) The table shows how many cabinets your firm can make with a variable quantity of labor hired. | | |After which worker does the firm begin to experience diminishing returns to labor? | |B) |second | Use the following to answer question 8: [pic] |8. (Table: Costs of Producing Bagels) Average total cost reaches its minimum value for the ________ bagel. | |C) |fourth | Use the following to answer question 13: [pic] |13. |(Table: Soybean Cost) The costs of production of a perfectly competitive soybean farmer are given in the table. If the market | | |price of a bushel of soybeans is $15, how many bushels will the farmer produce to maximize short-run profit? | |B) |5 | Use the following to answer question 14: Figure: A Firms Cost Curves [pic] |14. |(Figure: A Firms Cost Curves) The curve labeled V represents the firms ________ curve. | |C) |marginal cost | Use the following to answer question 17: Figure: Profit Maximizing [pic] |17. |(Figure: Profit Maximizing) The figure shows cost curves for a firm operating in a perfectly competitive market. Which of the | | |following statements is true? | |B) |AFC is represented in this figure by the vertical distance between Curve N and Curve O at any level of output. |