Chapters 22-24 EconLab 4 - Custom Scholars
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# Chapters 22-24 EconLab 4

question
The​ short-run production function for a manufacturer of portable power banks is shown at the right. Based on this​ information, calculate the marginal product at each quantity of labor.
0 0
1 20 20 (20-0)
2 55 35 (55-20)
3 80 25 (80-55)
4 100 20 (100-80)
5 110 10 (110-100)
6 115 5 (115-110)
question
In the short​ run, if a firm continues to add​ workers, marginal product must begin to diminish because
each worker has less capital to work with.
question
The following table shows the relationship between workers and output for a small factory in the short​ run, with capital held constant. Find the marginal product of labor
​(MPL​).

For this​ firm, diminishing marginal returns set in after worker ____
is employed.
0 0
1 40 40 (40-0)
2 88 48 (88-40)
3 141 53 (141-88)
4 183 42 (183-141)
5 201 18 (201-183)

3
question
In the table​ above, diminishing returns begins with the addition of worker number ____

In the table​ above, the marginal product becomes negative when the
4

6th
question
The cost structure of a manufacturer of microchips is described in the table shown below.

The​ firm's fixed costs equal ​\$15​,000 per day. Calculate the average variable cost​, average fixed cost​, and average total cost at each output level.
AVC: total cost of output - 15,000 / output
AFC: 15,000 / output
ATC: total cost of output / output
question
The​ long-run average cost curve
represents the various average costs attainable at the planning stage of the​ firm's decision making.
question
The shape of the​ short-run cost curves are the result of
the law of diminishing returns.
question
Which of the following is true about the​ long-run average cost​ curve?
The​ long-run average cost curve is the envelope of the​ firm's short-run average cost curves.
question
On the​ graph, where do economies of scale​ exist?
In the range of outputs from A to B.
question
The perfectly competitive firm is said to be a
price taker — it takes the price given by the market.
question
The demand curve for the perfect competitor is horizontal because
the market dictates each firm's price
question
Consider the diagram at​ right, which applies to a perfectly competitive​ firm, which at present faces a market clearing price of​ \$20 per unit and produces​ 10,000 units of output per week.

What is the​ firm's current average revenue per​ unit? \$__.

What are the present economic profits of this​ firm? \$__.

Is the firm maximizing economic​ profits?

If the market clearing price drops to​ \$12.50 per unit the firm should

If the market clearing price drops to​ \$7.50 per unit the firm should
\$20

\$47,500
(20-15.25)= 4.75 x 10,000

Yes, they are producing where the marginal revenue equals the marginal cost.

All of the above

All of the above
question
The decision making process for the perfectly competitive firm boils down to
deciding how much to produce
question
The table below represents the hourly output and cost structure for a local pizza shop. The market is perfectly​ competitive, and the market price of a pizza in the area is
​\$10. Total costs include all implicit opportunity costs. Calculate the pizza​ shop's marginal cost and marginal revenue at each rate of output and fill in the values in the table.

Based on marginal​ analysis, what is the​ profit-maximizing rate of output for the pizza​ shop? _____ pizzas.
MC: change in total cost / change quantity

MR: change in total revenue / change quantity

8
question
Profits are maximized for the perfectly competitive firm when the firm produces the quantity where
All of the above
question
In the figure shown at the​ right, what is the profit maximizing output and price in the short​ run?
46, \$50
question
Suppose that the market price in a perfectly competitive industry is ​\$50 per unit.
​1.) Using the line drawing tool​, draw the marginal revenue line given this price and label your line MR.
​2.) Using the rectangle drawing tool​, draw a rectangle showing the area of profit or loss of the firm and label it​ P/L.

The firm is operating at an economic ______ in the short run.
MR at 50
Profit/loss at 50-40 MC line

profit
question
Given the cost curves in the​ diagram, what market situation would you expect to​ occur?
A natural monopoly
question
The marginal revenue curve for a perfectly competitive firm is​ _________ while the marginal revenue curve of the monopolist is​ _________.
horizontal, downward sloping
question
For a​ monopolist, marginal revenue is

Using the line drawing
tool​, show a possible marginal revenue curve for this monopolist on the graph to the right. Label it​ 'MR'.
less than the price of the product.

MR line - (0,9) (5,0)
question
The table below depicts the daily​ output, price, and costs of a monopoly dry cleaner located near the campus of a remote college town. Compute the revenues at each output level and fill in the blanks
price x output

0
9.5
18
25.5
32
37.5
42
45.5
48
question
Given the information in the table at​ right, calculate the dry​ cleaner's marginal revenue​ (MR) and marginal cost​ (MC) at each output level.

Based on marginal​ analysis, what is the​ profit-maximizing level of​ output? ___ units.
3, 11.5
2.5, 10.5
2, 9.5
1, 8.5
2, 7.5
6.5, 6.5
8, 5.5
4, 4.5

6 units
question
The graph to the right shows demand and marginal revenue curves for a monopoly firm. Complete both steps and then check your answer. Assume the marginal cost is not constant.
​1.) Using the line drawing tool​, draw a line showing a possible​ short-run marginal cost curve for this firm. Label this line​ 'MC'.
​2.) Using the point drawing tool​, plot the point identifying this​ firm's profit-maximizing output level and corresponding price to be charged. Label this point​ 'B'.
MC line upward slope
B (14, 6)
question
Use the graph at right to answer the following questions.

What is the​ monopolist's profit-maximizing​ output? ____

At the​ profit-maximizing output​ rate, what is the average total​ cost? ​\$___

At the​ profit-maximizing output​ rate, what is the average​ revenue? ​\$___

At the​ profit-maximizing output​ rate, what is the​ monopolist's total​ cost? ​\$___

At the​ profit-maximizing output​ rate, what is the​ monopolist's total​ revenue? ​\$___

What is the maximum​ profit? ​\$___
5000

\$5.25

\$6

\$26,250

\$30,000

\$3,750
1 of 24
question
The​ short-run production function for a manufacturer of portable power banks is shown at the right. Based on this​ information, calculate the marginal product at each quantity of labor.
0 0
1 20 20 (20-0)
2 55 35 (55-20)
3 80 25 (80-55)
4 100 20 (100-80)
5 110 10 (110-100)
6 115 5 (115-110)
question
In the short​ run, if a firm continues to add​ workers, marginal product must begin to diminish because
each worker has less capital to work with.
question
The following table shows the relationship between workers and output for a small factory in the short​ run, with capital held constant. Find the marginal product of labor
​(MPL​).

For this​ firm, diminishing marginal returns set in after worker ____
is employed.
0 0
1 40 40 (40-0)
2 88 48 (88-40)
3 141 53 (141-88)
4 183 42 (183-141)
5 201 18 (201-183)

3
question
In the table​ above, diminishing returns begins with the addition of worker number ____

In the table​ above, the marginal product becomes negative when the
4

6th
question
The cost structure of a manufacturer of microchips is described in the table shown below.

The​ firm's fixed costs equal ​\$15​,000 per day. Calculate the average variable cost​, average fixed cost​, and average total cost at each output level.
AVC: total cost of output - 15,000 / output
AFC: 15,000 / output
ATC: total cost of output / output
question
The​ long-run average cost curve
represents the various average costs attainable at the planning stage of the​ firm's decision making.
question
The shape of the​ short-run cost curves are the result of
the law of diminishing returns.
question
Which of the following is true about the​ long-run average cost​ curve?
The​ long-run average cost curve is the envelope of the​ firm's short-run average cost curves.
question
On the​ graph, where do economies of scale​ exist?
In the range of outputs from A to B.
question
The perfectly competitive firm is said to be a
price taker — it takes the price given by the market.
question
The demand curve for the perfect competitor is horizontal because
the market dictates each firm's price
question
Consider the diagram at​ right, which applies to a perfectly competitive​ firm, which at present faces a market clearing price of​ \$20 per unit and produces​ 10,000 units of output per week.

What is the​ firm's current average revenue per​ unit? \$__.

What are the present economic profits of this​ firm? \$__.

Is the firm maximizing economic​ profits?

If the market clearing price drops to​ \$12.50 per unit the firm should

If the market clearing price drops to​ \$7.50 per unit the firm should
\$20

\$47,500
(20-15.25)= 4.75 x 10,000

Yes, they are producing where the marginal revenue equals the marginal cost.

All of the above

All of the above
question
The decision making process for the perfectly competitive firm boils down to
deciding how much to produce
question
The table below represents the hourly output and cost structure for a local pizza shop. The market is perfectly​ competitive, and the market price of a pizza in the area is
​\$10. Total costs include all implicit opportunity costs. Calculate the pizza​ shop's marginal cost and marginal revenue at each rate of output and fill in the values in the table.

Based on marginal​ analysis, what is the​ profit-maximizing rate of output for the pizza​ shop? _____ pizzas.
MC: change in total cost / change quantity

MR: change in total revenue / change quantity

8
question
Profits are maximized for the perfectly competitive firm when the firm produces the quantity where
All of the above
question
In the figure shown at the​ right, what is the profit maximizing output and price in the short​ run?
46, \$50
question
Suppose that the market price in a perfectly competitive industry is ​\$50 per unit.
​1.) Using the line drawing tool​, draw the marginal revenue line given this price and label your line MR.
​2.) Using the rectangle drawing tool​, draw a rectangle showing the area of profit or loss of the firm and label it​ P/L.

The firm is operating at an economic ______ in the short run.
MR at 50
Profit/loss at 50-40 MC line

profit
question
Given the cost curves in the​ diagram, what market situation would you expect to​ occur?
A natural monopoly
question
The marginal revenue curve for a perfectly competitive firm is​ _________ while the marginal revenue curve of the monopolist is​ _________.
horizontal, downward sloping
question
For a​ monopolist, marginal revenue is

Using the line drawing
tool​, show a possible marginal revenue curve for this monopolist on the graph to the right. Label it​ 'MR'.
less than the price of the product.

MR line - (0,9) (5,0)
question
The table below depicts the daily​ output, price, and costs of a monopoly dry cleaner located near the campus of a remote college town. Compute the revenues at each output level and fill in the blanks
price x output

0
9.5
18
25.5
32
37.5
42
45.5
48
question
Given the information in the table at​ right, calculate the dry​ cleaner's marginal revenue​ (MR) and marginal cost​ (MC) at each output level.

Based on marginal​ analysis, what is the​ profit-maximizing level of​ output? ___ units.
3, 11.5
2.5, 10.5
2, 9.5
1, 8.5
2, 7.5
6.5, 6.5
8, 5.5
4, 4.5

6 units
question
The graph to the right shows demand and marginal revenue curves for a monopoly firm. Complete both steps and then check your answer. Assume the marginal cost is not constant.
​1.) Using the line drawing tool​, draw a line showing a possible​ short-run marginal cost curve for this firm. Label this line​ 'MC'.
​2.) Using the point drawing tool​, plot the point identifying this​ firm's profit-maximizing output level and corresponding price to be charged. Label this point​ 'B'.
MC line upward slope
B (14, 6)
question
Use the graph at right to answer the following questions.

What is the​ monopolist's profit-maximizing​ output? ____

At the​ profit-maximizing output​ rate, what is the average total​ cost? ​\$___

At the​ profit-maximizing output​ rate, what is the average​ revenue? ​\$___

At the​ profit-maximizing output​ rate, what is the​ monopolist's total​ cost? ​\$___

At the​ profit-maximizing output​ rate, what is the​ monopolist's total​ revenue? ​\$___

What is the maximum​ profit? ​\$___
5000

\$5.25

\$6

\$26,250

\$30,000

\$3,750

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