# Economics and Figure

Topics: Economics, Costs, Marginal cost Pages: 11 (1710 words) Published: December 15, 2011
|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:

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|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) |22.5 |

Use the following to answer question 4:

Figure: Total Product

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|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 |

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|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. Cindy's monthly total fixed costs| | |are \$500, and her monthly total variable costs are \$2,500. If for some reason Cindy's fixed cost fell to \$400, then her: | |B) |average total costs would decrease. |

|3. |Rebecca knows that Becca Furniture's marginal cost curve is above the average total cost curve. This means Becca Furniture's | | |average total cost curve: | |A) |must be rising. |

Use the following to answer question 4:

Figure: Short-Run Costs II

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|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

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|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...