units(5) * 01 20. For the diagram above, the movement from point A to point B to point C can best be explained by which of the following factors? O A decrease in demand, followed by the entry of new firms, and an expansion in supply in a constant cost industry An increase in demand, followed by the entry of new firms, and an expansion of supply in an increasing cost industry A decrease in demand, followed by the exit of firms, and a decline in supply in an increasing cost industry An increase in demand. Followed by the exit of firms, and a decline in supply in a constant cost industry None of the above can adequately explain the movement

units(5) * 01 20. For the diagram above, the movement from point A to point B to point C can best be explained by which of the following factors? O A decrease in demand, followed by the entry of new firms, and an expansion in supply in a constant cost industry An increase in demand, followed by the entry of new firms, and an expansion of supply in an increasing cost industry A decrease in demand, followed by the exit of firms, and a decline in supply in an increasing cost industry An increase in demand. Followed by the exit of firms, and a decline in supply in a constant cost industry None of the above can adequately explain the movement

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question 9 □ Which of the following best explains why adding more of a variable input will eventually lead to smaller increases in output in the short run? Selected answer will be automatically saved. For keyboard navigation, press up/down arrow keys to select an answer. a b C d Owners will run out of good variable inputs to use. There will be less of the fixed input per variable input as more of a variable input is used. There will be less of the fixed input as more of the variable input is used. The amount of the variable input will decrease as more of it is used.
The following is a table of cost for a toy manufacturing firm. The variable input is labor. Use this table to answer the following question. Average variable Average fixed cost Average Variable Quantity of toys Total costs cost total cost costs $0 $20 $10 A $40 В In the cell B, which number is correct? 10 O 5 none of these options is correct O 15
Bob produces candles. The average total cost reaches its minimum at a quantity O A. the same as the quantity at which the average variable cost reaches its minimum. O B. lower than the quantity at which the average variable cost reaches its minimum. O C. the same as the quantity at which the marginal cost is at a maximum. O D. the same as the quantity at which the marginal cost is at a minimum. O E. greater than the quantity at which the average variable cost reaches its minimum.
The profit (in dollars) from the sale of x lawn mowers is II(x) = 70 x -0.07 x2 - 750. The correct interpretation of the marginal average profit of producing 40 mowers is Select one: O a. Can not tell. O b.At production level of 40 mowers a unit increase in production will increase the total profit by $0.40 per mower. O c. At production level of 40 mowers the average profit is increasing at a rate of $0.40 per mower. O d. At production level of 40 mowers the average profit is $0.40 per mower.
Refer to Figure 8.6, which shows just three of a firm's various possible short-run average cost curves. Suppose the firm is currently producing 160 units at an average cost of $90 per unit. Which of the following statements is true? $/unit 200 175 150 90 80 R 50 50 O ACI AC2 X 160 130 AC3 Output Figure 8.6 The firm could reduce its short-run average cost by producing less output. The firm is producing the level of output that minimizes short-run average cost. The firm is producing its output at the lowest possible long-run average cost. The firm could reduce its short-run average cost by producing more output.
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.
Economies of scale exist when the cost of finding a trading partner is low the firm is too large and too diversified O the firm is too small and too specialized O the long-run average cost decreases as the output increases. O a firm's decision to hire additional inputs does not result in an increase in the price of inputs
The following represents the short-run average total costs for a large shipping company. Short Run Average Total Costs Output 30 machines 40 machines 50 machines 100 270 280 300 200 236 210 250 300 335 340 320 Suppose that the company is at an output of 200 in the long run. Suddenly they have increased demand they have to quickly move to an output of 300, what is the new short-run average total costs of the firm at an output of 300 if they are still in the short run time period?
1. Figure 1 shows the production function of a firm. Y В Y2 Y1 X X1 X2 a) What are the variables along (i) of the X axis? (ii) Y axis? b) Does the firm operate in the short term or long term? c) Referring to the diagram above, what is the level of input where (i) firms experiencing increased marginal output? (i) does the firm experience a declining marginal output? (i) the firm achieves maximum marginal output? (iv) the firm achieves a blank marginal output?
If a firm quadruples(4x) in size and output triples (3x), what is the returns to scale? O A Increasing returns to scale O B O с O D Constant returns to scale Decreasing returns to scale Cannot determine
. What are the firm's fixed costs?$ c. What is the variable cost of producing 475 units of output (use least-cost)?$ d. How many units of the variable input should be used to maximize profits?e. What are the maximum profits this firm can earn?$ f. Over what range of the variable input usage do increasing marginal returns exist?From ___ to ____g. Over what range of the variable input usage do decreasing marginal returns exist?From ___ to ___h. Over what range of input usage do negative marginal returns exist?From ___ to ___ . What are the firm's fixed costs?$ c. What is the variable cost of producing 475 units of output (use least-cost)?$ d. How many units of the variable input should be used to maximize profits?e. What are the maximum profits this firm can earn?$ f. Over what range of the variable input usage do increasing marginal returns exist?From to g. Over what range of the…
5. Costs in the short run versus in the long run Scooter's Scooters is a large American manufacturer of electric scooters operating out of Mesa. Currently, the company produces all of its scooters using a single manufacturing facility, its factory in town. Recently, management has been considering expanding operations to one or two additional factories. The following table presents the manufacturer's monthly short-run average total cost (SRATC) for various levels of production if it operates out of one, two, or three factories. (Note: Q equals the total quantity of scooters produced by all factories.) Number of Factories Q = 50 Q = 100 220 140 310 190 400 HN 1 2 3 240 Average Total Cost (Dollars per scooter) Q = 150 Q = 200 120 160 120 160 120 120 Q = 250 240 190 140 Q = 300 400 310 220 Suppose Scooter's Scooters is currently producing 300 scooters per month in its only factory. Its short-run average total cost is S per scooter. Suppose Scooter's Scooters is expecting to produce 300…