Reference no: EM13208207

Labor Q TC VC ATC AVC MC
0 0 $100 0 - -
1 10 110 `0 11 1
2 25 120 20 4.8 0.8
3 35 130 30 3.71 0.85
4 40 140 40 3.5 1
5 42 150 50 3.57 1.19

13) The marginal product of the 3rd worker is:
a) 3
b) 10
c) 25
d) 35

14) How much are the variable costs per unit of labor?
a) 5
b) 10
c) 25
d) 100

15) Find the marginal costs to increase production from 25 to 35
a) $1.00
b) $1.50
c) $2.00
d) $5.00
16) For a given range of production, the extra product of each additional worker is less than the extra product of the worker hired just before. This statement describes _________ returns.
a) constant
b) negative
c) diminishing
d) increasing
e) average

17) A production function
a) relates inputs with output.
b) generates a curve that is upward sloping.
c) shows diminishing marginal product of an input, since it gets flatter as output rises.
d) only a and c. e) a, b, and c.

18) Honda's total cost of producing 4 cars is $225,000 and its total cost of producing 5 cars is $250,000. Pick the correct answer from the following:
a) Honda's AC of producing 5 cars is $50,000, and MC of producing the 5th. car is $25,000.
b) Honda's AC of producing 4 cars is $56,250, and MC of producing the 5th. car is $25,000.
c) Honda's AC is declining when increasing production from 4 cars to 5 cars, so the MC curve must lie below the AC curve when producing 4 cars or 5 cars.
d) all of the above.

19) If Boeing produces 9 jets per month, its long run total cost is $9.0 million per month. If it produces 10 jets per month, its long run total cost is $9.5 million per month. Pick the correct answer from below:
a) Boeing exhibits constant return to scale.
b) Boeing exhibits economies of scale.
c) Boeing exhibits diseconomies of scale.
d) need more information to answer.