QUESTION 7 Consider a coffee shop that can increase the amount of coffee sold by increasing the number of coffee machines. If the coffee seller faces diminishing marginal returns to the coffee machines, she must also face... O Decreasing marginal costs O Decreasing total cost Increasing Marginal Costs Increasing average costs O Constant average costs

QUESTION 7 Consider a coffee shop that can increase the amount of coffee sold by increasing the number of coffee machines. If the coffee seller faces diminishing marginal returns to the coffee machines, she must also face... O Decreasing marginal costs O Decreasing total cost Increasing Marginal Costs Increasing average costs O Constant average costs

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Increasing marginal returns means that as the firm expands its output, its Select one A. long-run average total cost decreases O B. long-run average total cost increases. short-run average total cost decreases D. short-run average total cost increases
Economics Consider ADNOC decreasing the hourly wage rate (i.e., hourly salary) to all workers employed in her oil factories. Which of the following state OA All Cost curves, except the Fixed Cost, will shift upwards O B. All Cost curves, except the Fixed Cost, will shift downwards OC. All Cost curves (i.e., Fixed, Variable and Total) will shift upwards O D. All Cost curves (i.e., Fixed, Variable and Total) will shift downwards
You learn that a firm's average total costs (ATC) and average variable costs (AVC) are exactly equal. What does that mean? O Marginal cost is zero O ATC and AVC must be equal to zero O Average fixed costs (AFC) are zero O Economic profit is positive O Economic profit is negative
Ike's Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is considering expanding production to two or even three factories. The following table shows the company's short-run average total cost each month for various levels of production if it uses one, two, or three factories. (Note: Q equals the total quantity of bikes produced by all factories.) Average Total Cost (Dollars per bike) Number of Factories Q = 100 O = 200 O = 300 Q = 400 O = 500 O = 600 1 260 200 160 200 280 400 2 330 240 160 160 240 330 400 280 200 160 200 260 Suppose Ike's Bikes is currently producing 100 bikes per month in its only factory. Its short-run average total cost is $ per bike. kes Suppose Ike's Bikes is expecting to produce 100 bikes per month for several years. In this case, in the long run, it would choose to produce using On the following graph, plot the three short-run average total cost curves (SRATC) for Ike's Bikes from the previous…
4. The shape of a firm's long-run average cost curve depends o how costs vary with scale of operation. Draw a long-run average cost curve for a firm that exhibits economies of scale, constant returns to scale, and diseconomies of scale. Identify each of these sections of the cost curve and explain why each section exemplifies its specific type of return to scale.
8. Consider a firm's short run and long run average costs depicted below: 300 270 240 210 180+ Wunt 150 120+ 90 60 30 ---- W X AC LRAC 200 400 600 800 1000 1200 1400 1600 1800 2000 # of units Suppose this firm has been producing 400 units per month for a long time. If it decides to increase its output to 800 units per month, then its average cost will O A. fall from $300/unit to $150/unit initially, then rise to $240/unit eventually. O B. fall from $300/unit to $60/unit initially, then rise to $240/unit eventually. O C. fall from $300/unit to $60/unit and remain there. O D. fall from $300/unit to $240/unit and remain there. O E. rise from $150/unit to $240/unit initially, then fall to $60/unit eventually. OF. rise from $150/unit to $300/unit initially, then fall to $60/unit eventually. O G. fall from $150/unit to $60/unit and remain there. OH. rise from $150/unit to $240/unit and remain there.
Marginal cost is average variable cost when O a. equal to; average variable cost is minimized. O b. greater than; average fixed cost is minimized O c. equal to; average total cost is minimized O d. less than; total cost is maximized If Mark produces five pairs of earrings, his total costs are Number of TVC MC AVC TFC TC Earnings 100 1 50 2 3 46.67 4 300 5 270 O a. $320. O b. $370. O c. $400. O d. $360.
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Question 6 Not yet answered Marked out of 1 Remove flag Drawinue nare If the average fixed cost of seven tubs of ice cream is $50, the total cost of zero tubs is: O a. $350 Ob. $250 c. $500 Od. $200 Clear my choice Next page
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