Bob's production function is Q = x,0.338695x20.129865 where x1 = quantity of labor and x2 = quantity of land used in the production process. Bob has a 5 year lease on 324.689 acres of land. In the short run, Bob's average total cost of production will be O A. Equal to his long run average cost of production O B. Greater than his long run average cost of production O C. Less than his long run average cost of production D. Either A or B could be correct

Bob's production function is Q = x,0.338695x20.129865 where x1 = quantity of labor and x2 = quantity of land used in the production process. Bob has a 5 year lease on 324.689 acres of land. In the short run, Bob's average total cost of production will be O A. Equal to his long run average cost of production O B. Greater than his long run average cost of production O C. Less than his long run average cost of production D. Either A or B could be correct

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Which of the following is always true? When marginal costs are less than average total costs, average total costs will be decreasing. When average fixed costs are falling, marginal costs must be less than average fixed costs. O When average fixed costs are rising, marginal costs must be greater than average total costs. When marginal costs are greater than average total costs, average total costs will be decreasing.
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A firm has a fixed production cost of $1,000 and a constant marginal cost of production of $700 per unit produced. What is the firm's total cost function? O A. TC = 1,000 + (700q) O B. TC = 1,000 + (700q). OC. TC = 700q. O D. TC = 1,000. The firm's average total cost (ATC) of production is O A. ATC = 1,000 + (700q). OB. 1,000 + (700q) ATC = Oc. 1,000 ATC = O D. ATC = 700q. O E. ATC = 700. If the firm wanted to minimize the average total cost, would it choose to be very large or very small? Explain. OA. very small because the average total cost of production rises with output. O B.- very large because the average variable cost of production falls with output. OC. very small because the average fixed cost of production rises with output. O D. very small because the total cost of production rises with output. O E. very large because the average total cost of production falls with output.
K Suppose that a firm's production function is q=5x in the short run, where there are fixed costs of $1,000, and x is the variable input whose cost is $625 per unit. What is the total cost of producing a level of output q? In other words, identify the total cost function C(q). The total cost of producing ya level of output q is A. C(q)= 1,000. OB. OC. OD. OE C(q)= 1,000+ C(q)= 1,000+ C(q) = 1,000+ 625q² C(q)= 25 q² 25 625q² 25 0.5 q B Dollars per unit of output 2000- 1800- 1600- 1400- 1200- 1000- 800- 600 400- 200- a 12 14 10 Quantity nchack 18 (1) Incorrect
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