Refer to Figure 7.2.1 above. When 2 units of output are produced: I. The average total cost of a given level of output is the slope of the line from the origin to the total cost curve at that level of output.
When the farmer's profit is maximized, total cost equals: the difference between revenue and variable cost. positive because price exceeds average variable costs. Refer to Table 8.1. That the firm is perfectly competitive is evident from its: constant marginal revenue. is U-shaped.
firm's output is smaller than the profit maximizing quantity. Refer to Scenario 10.3. Suppose that a tax of $5 per unit of output is imposed on red herring producers. The price of red herring will: increase by less than $5. Refer to Scenario 10.2. What level of output maximizes total revenue? A monopolist has equated marginal revenue to zero.
When the firm produces the loss-minimizing level of output, it can recover: all of the variable cost and part of the fixed cost. ... ... horizontal.
A utility function that generates a ranking of market baskets in order of most to least preferred is called: an ordinal utility function.
The budget constraint for a consumer who only buys apples (A) and bananas (B) is PAA + PBB = I where consumer income is I, the price of apples is PA, and the price of bananas is PB. To plot this budget constraint in a figure with apples on the horizontal axis, we should use a budget line represented by the slope-intercept equation:
The budget line is now convex to (bows in toward) the origin.
the slope of the budget line will not change.
An increase in the firm's fixed costs will also shift the firm's short-run supply curve to the left. II. An increase in the firm's fixed costs will not shift the firm's short-run supply curve to the right or left, but it may alter how much of the marginal cost curve is used to form the short-run supply curve.
I. The average total cost of a given level of output is the slope of the line from the origin to the total cost curve at that level of output.
In a short-run production process, the marginal cost is rising and the average variable cost is falling as output is increased. Thus
average product of labor. The marginal rate of technical substitution is equal to the: ratio of the marginal products of the inputs. If the law of diminishing returns applies to labor then: after some level of employment, the marginal product of labor must fall.
after some level of employment, the marginal product of labor must fall.
I is false, and II is true.
We typically think of labor as a variable cost, even in the very short run. However, some labor costs may be fixed. Which of the following items represents an example of a fixed labor cost?
I. A firm's marginal cost curve does not depend on the level of fixed costs.
I. The average total cost of a given level of output is the slope of the line from the origin to the total cost curve at that level of output.
When labor usage is at 12 units, output is 36 units. From this we may infer that:
Output decreases because the marginal cost curve shifts upward.
I. An increase in the firm's fixed costs will also shift the firm's short-run supply curve to the left.
I is true, and II is false.
there is diminishing marginal product for one or more variable inputs and marginal costs increase as output increases are correct .