Problem Set #10

Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Analyzing the behavior of the firm enhances our understanding of a. what decisions lie behind the market supply curve. b. how consumers allocate their income to purchase scarce resources. c. how financial institutions set interest rates. d. whether resources are allocated fairly. 2. Industrial organization is the study of how a. labor unions organize workers in industries. b. profitable firms are in organized industries. c. industries organize for political advantage. d. firms' decisions regarding prices and quantities depend on the market conditions they face. 3. Economists assume that the typical person who starts her own business does so with the intention of a. donating the profits from her business to charity. b. capturing the highest number of sales in her industry. c. maximizing profits. d. minimizing costs. 4. When a firm is making a profit-maximizing production decision, which of the following principles of economics is likely to be most important to the firm's decision? a. The cost of something is what you give up to get it. b. A country's standard of living depends on its ability to produce goods and services. c. Prices rise when the government prints too much money. d. Governments can sometimes improve market outcomes. 5. Profit is defined as a. net revenue minus depreciation. b. total revenue minus total cost. c. average revenue minus average total cost. d. marginal revenue minus marginal cost. 6. XYZ corporation produced 300 units of output but sold only 275 of the units it produced. The average cost of production for each unit of output produced was $100. Each of the 275 units sold was sold for a price of $95. Total profit for the XYZ corporation would be a. -$3,875. b. $26,125. c. $28,500. d. $30,000. 7. A firm's opportunity costs of production are equal to its a. explicit costs only. b. implicit costs only. c. explicit costs + implicit costs. d. explicit costs + implicit costs + total revenue.

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8. Susan used to work as a telemarketer, earning $25,000 per year. She gave up that job to start a catering business. In calculating the economic profit of her catering business, the $25,000 income that she gave up is counted as part of the catering firm's a. total revenue. b. opportunity costs. c. explicit costs. d. marginal costs. 9. John has decided to start his own lawn-mowing business. To purchase the mowers and the trailer to transport the mowers, John withdrew $1,000 from his savings account, which was earning 3% interest, and borrowed an additional $2,000 from the bank at an interest rate of 7%. What is John's annual opportunity cost of the financial capital that has been invested in the business? a. $30 b. $140 c. $170 d. $300

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____ 10. Dianne has decided to start her own photography studio. To purchase the necessary equipment, Dianne withdrew $10,000 from her savings account, which was earning 3% interest, and borrowed an additional $5,000 from the bank at an interest rate of 8%. What is Dianne's annual opportunity cost of the financial capital that has been invested in the business? a. $300 b. $400 c. $700 d. $1,650 ____ 11. An example of an explicit cost of production would be the a. cost of forgone labor earnings for an entrepreneur. b. lost opportunity to invest in capital markets when the money is invested in one's business. c. lease payments for the land on which a firms factory stands. d. Both a and c are correct. ____ 12. Jane decides to open her own business and earns $50,000 in accounting profit the first year. When deciding to open her own business, she turned down three separate job offers with annual salaries of $30,000, $40,000, and $45,000. What is Jane's economic profit from running her own business? a. $-55,000 b. $-5,000 c. $5,000 d. $20,000 ____ 13. Bev is opening her own court-reporting business. She financed the business by withdrawing money from her personal savings account. When she closed the account, the bank representative mentioned that she would have earned $300 in interest next year. If Bev hadnt opened her own business, she would have earned a salary of $25,000. In her first year, Bevs revenues were $30,000. Which of the following statements is correct? a. Bevs total explicit costs are $25,300. b. Bevs total implicit costs are $300. c. Bevs accounting profits exceed her economic profits by $300. d. Bevs economic profit is $4,700. ____ 14. Economic profit a. will never exceed accounting profit.

b. is most often equal to accounting profit. c. is always at least as large as accounting profit. d. is a less complete measure of profitability than accounting profit. ____ 15. A production function describes a. how a firm maximizes profits. b. how a firm turns inputs into output. c. the minimal cost of producing a given level of output. d. the relationship between cost and output. Figure 13-1 Suppose the production function shifts from TP1 to TP2.
Output

TP2

TP1

Inputs

____ 16. Refer to Figure 13-1. In this diagram, the shift in the total product curve represents an increase in the firm's a. costs of production. b. productivity. c. diseconomies. d. market share. ____ 17. Refer to Figure 13-1. Which of the following could explain why the total product curve shifted in this diagram? a. A reduction in capital equipment available to the firm. b. Labor skills have become rusty and outdated in the firm. c. The firm has developed new technology in its production facility. d. The firm is now receiving a higher price for its product. ____ 18. Which of these assumptions is often realistic for a firm in the short run? a. The firm can vary both the size of its factory and the number of workers it employs. b. The firm can vary the size of its factory but not the number of workers it employs. c. The firm can vary the number of workers it employs but not the size of its factory. d. The firm can vary neither the size of its factory nor the number of workers it employs. Figure 13-2

100 90 80 70 60 50 40 30 20 10

Output

W orkers

____ 19. Refer to Figure 13-2. The graph illustrates a typical a. total-cost curve. b. production function. c. production possibilities frontier. d. marginal product of labor curve. ____ 20. Refer to Figure 13-2. As the number of workers increases, a. total output increases but at a decreasing rate. b. marginal product increases but at a decreasing rate. c. marginal product increases at an increasing rate. d. total output decreases. ____ 21. Refer to Figure 13-2. As the number of workers increases, a. marginal product decreases. b. total output decreases. c. marginal product increases but at a decreasing rate. d. Both a and b are correct. ____ 22. Refer to Figure 13-2. With regard to cookie production, the figure implies a. diminishing marginal product of workers. b. diminishing marginal cost of cookie production. c. decreasing cost of cookie production. d. increasing marginal product of workers. ____ 23. Refer to Figure 13-2. The graph illustrates a typical production function. Based on its shape, what does the corresponding total cost curve look like? a. an upward-sloping curve that increases at an increasing rate b. an upward-sloping curve that increases at a decreasing rate c. a downward-sloping curve d. a horizontal straight line ____ 24. The marginal product of labor is equal to the a. incremental cost associated with a one unit increase in labor. b. incremental profit associated with a one unit increase in labor. c. increase in labor necessary to generate a one unit increase in output. d. increase in output obtained from a one unit increase in labor.

____ 25. Let L represent the number of workers hired by a firm and let Q represent that firm's quantity of output. Assume two points on the firm's production function are (L = 12, Q = 122) and (L = 13, Q = 132). Then the marginal product of the 13th worker is a. 8 units of output. b. 10 units of output. c. 122 units of output. d. 132 units of output. ____ 26. Let L represent the number of workers hired by a firm and let Q represent that firm's quantity of output. Assume two points on the firm's production function are (L = 5, Q = 125) and (L = 6, Q = 162). Then the marginal product of the 6th worker is a. 25 units of output. b. 27 units of output. c. 37 units of output. d. 162 units of output. ____ 27. On a 100-acre farm, a farmer is able to produce 3,000 bushels of wheat when he hires 2 workers. He is able to produce 4,400 bushels of wheat when he hires 3 workers. Which of the following possibilities is consistent with the property of diminishing marginal product? a. The farmer is able to produce 5,600 bushels of wheat when he hires 4 workers. b. The farmer is able to produce 5,800 bushels of wheat when he hires 4 workers. c. The farmer is able to produce 6,000 bushels of wheat when he hires 4 workers. d. Any of the above could be correct. ____ 28. If the total cost curve gets steeper as output increases, the firm is experiencing a. diseconomies of scale. b. economies of scale. c. diminishing marginal product. d. increasing marginal product. ____ 29. Total cost can be divided into two types of costs: a. fixed costs and variable costs. b. fixed costs and marginal costs. c. variable costs and marginal costs. d. average costs and marginal costs. ____ 30. Which of the following costs do not vary with the amount of output a firm produces? a. average fixed costs b. fixed costs and average fixed costs c. marginal costs and average fixed costs d. fixed costs ____ 31. Fixed costs can be defined as costs that a. vary inversely with production. b. vary in proportion with production. c. are incurred only when production is large enough. d. are incurred even if nothing is produced. ____ 32. For a construction company that builds houses, which of the following costs would be a fixed cost? a. the $20 per hour wage paid to a construction foreman b. the $30,000 per year salary paid to the company's bookkeeper c. the $2 per worker-hour paid to the state government for workers compensation insurance d. All of the above are correct.

____ 33. Average total cost tells us the a. total cost of the first unit of output, if total cost is divided evenly over all the units produced. b. cost of a typical unit of output, if total cost is divided evenly over all the units produced. c. cost of the last unit of output, if total cost does not include a fixed cost component. d. variable cost of a firm that is producing at least one unit of output. ____ 34. At Bert's Bootery, the total cost of producing twenty pairs of boots is $400. The marginal cost of producing the twenty-first pair of boots is $83. We can conclude that the a. average variable cost of 21 pairs of boots is $23. b. average total cost of 21 pairs of boots is $23. c. average total cost of 21 pairs of boots is $15.09. d. marginal cost of the 20th pair of boots is $20. ____ 35. Toms Tent Company has total fixed costs of $300,000 per year. The firm's average variable cost is $80 for 10,000 tents. At that level of output, the firm's average total costs equal a. $80 b. $90 c. $100 d. $110 ____ 36. Suppose that for a particular firm the only variable input into the production process is labor and that output equals zero when no workers are hired. In addition, suppose that when four units of output are produced, the total cost is $175, and the average variable cost is $33.75. What would the average fixed cost be if ten units were produced? a. $4 b. $10 c. $40 d. $135 ____ 37. A firm produces 300 units of output at a total cost of $1,000. If fixed costs are $100, a. average fixed cost is $10. b. average variable cost is $3. c. average total cost is $4. d. average total cost is $5. ____ 38. The amount by which total cost rises when the firm produces one additional unit of output is called a. average cost. b. marginal cost. c. fixed cost. d. variable cost. ____ 39. Marginal cost tells us the a. value of all resources used in a production process. b. marginal increment to profitability when price is constant. c. amount by which total cost rises when output is increased by one unit. d. amount by which output rises when labor is increased by one unit. ____ 40. A firm has a fixed cost of $500 in its first year of operation. When the firm produces 100 units of output, its total costs are $3,500. When it produces 101 units of output, its total costs are $3,750. What is the marginal cost of producing the 101st unit of output? a. $250

b. $275 c. $340.91 d. $350 ____ 41. Thirsty Thelma owns and operates a small lemonade stand. When Thelma is producing a low quantity of lemonade she has few workers and her equipment is not being fully utilized. Because she can easily put her idle resources to use, a. the marginal cost of an extra worker is large. b. the marginal cost of one more glass of lemonade is smaller than if output were high. c. the marginal product of an extra worker is small. d. her lemonade stand is likely to be crowded with workers. ____ 42. The average fixed cost curve a. always declines with increased levels of output. b. always rises with increased levels of output. c. declines as long as it is above marginal cost. d. declines as long as it is below marginal cost. ____ 43. Average total cost is very high when a small amount of output is produced because a. average variable cost is high. b. average fixed cost is high. c. marginal cost is high. d. marginal product is high. ____ 44. When marginal cost is less than average total cost, a. marginal cost must be falling. b. average variable cost must be falling. c. average total cost is falling. d. average total cost is rising. ____ 45. When marginal cost exceeds average total cost, a. average fixed cost must be rising. b. average total cost must be rising. c. average total cost must be falling. d. marginal cost must be falling. ____ 46. Marginal cost is equal to average total cost when a. average variable cost is falling. b. average fixed cost is rising. c. marginal cost is at its minimum. d. average total cost is at its minimum. ____ 47. The minimum points of the average variable cost and average total cost curves occur where a. the marginal cost curve lies below the average variable cost and average total cost curves. b. the marginal cost curve intersects those curves. c. the average variable cost and average total cost curves intersect. d. the slope of total cost is the smallest. Figure 13-4

Cost

D
11 10 9 8 7 6 5 4 3 2 1

C B

A
1 2 3 4 5 6 7 8 9 10 11 12 Quantity

____ 48. Refer to Figure 13-4. Which of the curves is most likely to represent average fixed cost? a. A b. B c. C d. D ____ 49. Refer to Figure 13-4. Which curve is most likely to represent average total cost? a. A b. B c. C d. D ____ 50. Refer to Figure 13-4. Which curve is most likely to represent marginal cost? a. A b. B c. C d. D ____ 51. Refer to Figure 13-4. Curve D is increasing because of a. diminishing marginal product. b. increasing marginal product. c. the fact that increasing marginal product follows decreasing marginal product. d. the fact that decreasing marginal product follows increasing marginal product. ____ 52. Refer to Figure 13-4. Curve A is always declining because of a. diminishing marginal product. b. dividing fixed costs by higher and higher levels of output. c. the fact that increasing marginal product follows decreasing marginal product. d. the fact that decreasing marginal product follows increasing marginal product. ____ 53. Refer to Figure 13-4. Curve D intersects curve C a. where the firm maximizes profit. b. at the minimum of average fixed cost. c. at the efficient scale. d. where fixed costs equal variable costs.

____ 54. Diminishing marginal product suggests that the marginal a. cost of an extra worker is unchanged. b. cost of an extra worker is less than the previous worker's marginal cost. c. product of an extra worker is less than the previous worker's marginal product. d. product of an extra worker is greater than the previous worker's marginal product. ____ 55. The nature of a firms cost (fixed or variable) depends on the a. firms revenues. b. time horizon under consideration. c. price the firm charges for output. d. explicit but not implicit costs. ____ 56. In the long run, a. inputs that were fixed in the short run remain fixed. b. inputs that were fixed in the short run become variable. c. inputs that were variable in the short run become fixed. d. variable inputs are rarely used. ____ 57. The total cost to the firm of producing zero units of output is a. zero in both the short run and the long run. b. its fixed cost in the short run and zero in the long run. c. its fixed cost in both the short run and the long run. d. its variable cost in both the short run and the long run. ____ 58. When comparing short-run average total cost with long-run average total cost at a given level of output, a. short-run average total cost is typically above long-run average total cost. b. short-run average total cost is typically the same as long-run average total cost. c. short-run average total cost is typically below long-run average total cost. d. the relationship between short-run and long-run average total cost follows no clear pattern. ____ 59. The most likely explanation for economies of scale is a. coordination problems. b. specialization of labor. c. increasing marginal cost. d. decreasing marginal cost. ____ 60. Economies of scale occur when a firms a. marginal costs are constant as output increases. b. long-run average total costs are decreasing as output increases. c. long-run average total costs are increasing as output increases. d. marginal costs are equal to average total costs for all levels of output. ____ 61. If a firm wants to capitalize on economies of scale, it may be able to do so by a. assigning limited tasks to its employees, so they can master those tasks. b. employing a smaller number of workers. c. producing a smaller quantity of output. d. producing an output level higher than the efficient scale. ____ 62. In the long run Firm A incurs total costs of $1,050 when output is 30 units and $1,200 when output is 40 units. Firm A exhibits a. diseconomies of scale because total cost is rising as output rises. b. diseconomies of scale because average total cost is rising as output rises.

c. economies of scale because total cost is rising as output rises. d. economies of scale because average total cost is falling as output rises. ____ 63. Constant returns to scale occur when the firms a. long-run total costs are constant as output increases. b. long-run average total costs are constant as output increases. c. long-run average cost curve is falling as output increases. d. long-run average cost curve is rising as output increases. ____ 64. In the long run Firm A incurs total costs of $1,200 when output is 30 units and $1,600 when output is 40 units. Firm A exhibits a. diseconomies of scale because total cost is rising as output rises. b. constant returns to scale because average total cost is constant as output rises. c. diseconomies of scale because average total cost is rising as output rises. d. economies of scale because average total cost is falling as output rises. ____ 65. Diseconomies of scale occur when a firms a. marginal costs are constant as output increases. b. long-run average total costs are decreasing as output increases. c. long-run average total costs are increasing as output increases. d. marginal costs are equal to average total costs for all levels of output.

Problem Set #10 Answer Section

MULTIPLE CHOICE 1. ANS: NAT: MSC: 2. ANS: NAT: MSC: 3. ANS: NAT: MSC: 4. ANS: NAT: MSC: 5. ANS: NAT: MSC: 6. ANS: NAT: MSC: 7. ANS: NAT: MSC: 8. ANS: NAT: MSC: 9. ANS: NAT: MSC: 10. ANS: NAT: MSC: 11. ANS: NAT: MSC: 12. ANS: NAT: MSC: 13. ANS: NAT: TOP: 14. ANS: NAT: MSC: 15. ANS: A PTS: 1 DIF: Analytic LOC: Costs of production Applicative D PTS: 1 DIF: Analytic LOC: Costs of production Definitional C PTS: 1 DIF: Analytic LOC: Costs of production Applicative A PTS: 1 DIF: Analytic LOC: Costs of production Interpretive B PTS: 1 DIF: Analytic LOC: Costs of production Definitional A PTS: 1 DIF: Analytic LOC: Costs of production Applicative C PTS: 1 DIF: Analytic LOC: Costs of production Definitional B PTS: 1 DIF: Analytic LOC: Costs of production Interpretive C PTS: 1 DIF: Analytic LOC: Costs of production Analytical C PTS: 1 DIF: Analytic LOC: Costs of production Analytical C PTS: 1 DIF: Analytic LOC: Costs of production Interpretive C PTS: 1 DIF: Analytic LOC: Costs of production Analytical D PTS: 1 DIF: Analytic LOC: Costs of production Economic profit | Accounting profit A PTS: 1 DIF: Analytic LOC: Costs of production Interpretive B PTS: 1 DIF: 1 REF: 13-0 TOP: Supply curve REF: 13-0 TOP: Industrial organization REF: 13-1 TOP: Profit maximization REF: 13-1 TOP: Profit maximization REF: 13-1 TOP: Profit REF: 13-1 TOP: Profit REF: 13-1 TOP: Opportunity cost REF: 13-1 TOP: Opportunity cost REF: 13-1 TOP: Opportunity cost REF: 13-1 TOP: Opportunity cost REF: 13-1 TOP: Explicit costs REF: 13-1 TOP: Economic profit REF: 13-1 MSC: Analytical REF: 13-1 TOP: Economic profit REF: 13-2

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NAT: MSC: ANS: NAT: MSC: ANS: NAT: MSC: ANS: NAT: MSC: ANS: NAT: MSC: ANS: NAT: MSC: ANS: NAT: MSC: ANS: NAT: MSC: ANS: NAT: TOP: ANS: NAT: MSC: ANS: NAT: MSC: ANS: NAT: MSC: ANS: NAT: MSC: ANS: NAT: MSC: ANS: NAT: MSC: ANS: NAT: MSC: ANS: NAT:

Analytic LOC: Costs of production Definitional B PTS: 1 DIF: Analytic LOC: Costs of production Analytical C PTS: 1 DIF: Analytic LOC: Costs of production Interpretive C PTS: 1 DIF: Analytic LOC: Costs of production Definitional B PTS: 1 DIF: Analytic LOC: Costs of production Interpretive A PTS: 1 DIF: Analytic LOC: Costs of production Analytical A PTS: 1 DIF: Analytic LOC: Costs of production Analytical A PTS: 1 DIF: Analytic LOC: Costs of production Analytical A PTS: 1 DIF: Analytic LOC: Costs of production Production function | Total-cost curve D PTS: 1 DIF: Analytic LOC: Costs of production Definitional B PTS: 1 DIF: Analytic LOC: Costs of production Applicative C PTS: 1 DIF: Analytic LOC: Costs of production Applicative A PTS: 1 DIF: Analytic LOC: Costs of production Analytical C PTS: 1 DIF: Analytic LOC: Costs of production Interpretive A PTS: 1 DIF: Analytic LOC: Costs of production Definitional D PTS: 1 DIF: Analytic LOC: Costs of production Definitional D PTS: 1 DIF: Analytic LOC: Costs of production

TOP: Production function 2 REF: 13-2 TOP: Production function REF: 13-2 TOP: Production function REF: 13-2 TOP: Production function | Short run REF: 13-2 TOP: Production function REF: 13-2 TOP: Production function REF: 13-2 TOP: Production function REF: 13-2 TOP: Marginal product REF: 13-2 MSC: Interpretive REF: 13-2 TOP: Marginal product REF: 13-2 TOP: Marginal product REF: 13-2 TOP: Marginal product REF: 13-2 TOP: Diminishing marginal product REF: 13-2 TOP: Total-cost curve REF: 13-3 TOP: Fixed costs | Variable costs REF: 13-3 TOP: Fixed costs REF: 13-3 TOP: Fixed costs

MSC: 32. ANS: NAT: MSC: 33. ANS: NAT: MSC: 34. ANS: NAT: MSC: 35. ANS: NAT: MSC: 36. ANS: NAT: MSC: 37. ANS: NAT: MSC: 38. ANS: NAT: MSC: 39. ANS: NAT: MSC: 40. ANS: NAT: MSC: 41. ANS: NAT: MSC: 42. ANS: NAT: MSC: 43. ANS: NAT: MSC: 44. ANS: NAT: MSC: 45. ANS: NAT: MSC: 46. ANS: NAT: MSC: 47. ANS: NAT: MSC:

Interpretive B Analytic Interpretive B Analytic Interpretive B Analytic Applicative D Analytic Applicative A Analytic Analytical B Analytic Analytical B Analytic Definitional C Analytic Interpretive A Analytic Analytical B Analytic Interpretive A Analytic Interpretive B Analytic Interpretive C Analytic Interpretive B Analytic Interpretive D Analytic Interpretive B Analytic Interpretive

PTS: 1 DIF: 2 LOC: Costs of production PTS: 1 DIF: 2 LOC: Costs of production PTS: 1 DIF: 3 LOC: Costs of production PTS: 1 DIF: 2 LOC: Costs of production PTS: 1 DIF: 3 LOC: Costs of production PTS: 1 DIF: 2 LOC: Costs of production PTS: 1 DIF: 1 LOC: Costs of production PTS: 1 DIF: 2 LOC: Costs of production PTS: 1 DIF: 2 LOC: Costs of production PTS: 1 DIF: 2 LOC: Costs of production PTS: 1 DIF: 2 LOC: Costs of production PTS: 1 DIF: 2 LOC: Costs of production PTS: 1 DIF: 2 LOC: Costs of production PTS: 1 DIF: 2 LOC: Costs of production PTS: 1 DIF: 2 LOC: Costs of production PTS: 1 DIF: 2 LOC: Costs of production

REF: 13-3 TOP: Fixed costs REF: 13-3 TOP: Average total cost REF: 13-3 TOP: Average total cost REF: 13-3 TOP: Average total cost REF: 13-3 TOP: Average fixed cost REF: 13-3 TOP: Average variable cost REF: 13-3 TOP: Marginal cost REF: 13-3 TOP: Marginal cost REF: 13-3 TOP: Marginal cost REF: 13-3 TOP: Marginal cost REF: 13-3 TOP: Cost curves | Average fixed cost REF: 13-3 TOP: Cost curves | Average total cost REF: 13-3 TOP: Cost curves REF: 13-3 TOP: Cost curves REF: 13-3 TOP: Cost curves REF: 13-3 TOP: Cost curves

48. ANS: NAT: MSC: 49. ANS: NAT: MSC: 50. ANS: NAT: MSC: 51. ANS: NAT: MSC: 52. ANS: NAT: MSC: 53. ANS: NAT: MSC: 54. ANS: NAT: TOP: 55. ANS: NAT: MSC: 56. ANS: NAT: MSC: 57. ANS: NAT: MSC: 58. ANS: NAT: MSC: 59. ANS: NAT: MSC: 60. ANS: NAT: MSC: 61. ANS: NAT: MSC: 62. ANS: NAT: MSC: 63. ANS: NAT: MSC: 64. ANS:

A Analytic Interpretive C Analytic Interpretive D Analytic Interpretive A Analytic Analytical B Analytic Analytical C Analytic Analytical C Analytic Marginal cost B Analytic Interpretive B Analytic Interpretive B Analytic Interpretive A Analytic Analytical B Analytic Applicative B Analytic Definitional A Analytic Interpretive D Analytic Analytical B Analytic Definitional B

PTS: 1 DIF: 2 LOC: Costs of production PTS: 1 DIF: 2 LOC: Costs of production PTS: 1 DIF: 2 LOC: Costs of production PTS: 1 DIF: 3 LOC: Costs of production PTS: 1 DIF: 3 LOC: Costs of production PTS: 1 DIF: 3 LOC: Costs of production PTS: 1 DIF: 2 LOC: Costs of production | Diminishing marginal product PTS: 1 DIF: 1 LOC: Costs of production PTS: 1 DIF: 2 LOC: Costs of production PTS: 1 DIF: 2 LOC: Costs of production PTS: 1 DIF: 2 LOC: Costs of production PTS: 1 DIF: 1 LOC: Costs of production PTS: 1 DIF: 1 LOC: Costs of production PTS: 1 DIF: 2 LOC: Costs of production PTS: 1 DIF: 2 LOC: Costs of production PTS: 1 DIF: 2 LOC: Costs of production PTS: 1 DIF: 2

REF: 13-3 TOP: Cost curves | Average fixed cost REF: 13-3 TOP: Cost curves | Average total cost REF: 13-3 TOP: Cost curves | Marginal cost REF: 13-3 TOP: Cost curves | Marginal cost REF: 13-3 TOP: Cost curves | Average fixed cost REF: 13-3 TOP: Cost curves | Efficient scale REF: 13-3 MSC: Interpretive REF: 13-4 TOP: Short run | Long run REF: 13-4 TOP: Long run REF: 13-4 TOP: Short run | Long run REF: 13-4 TOP: Average total cost REF: 13-4 TOP: Economies of scale REF: 13-4 TOP: Economies of scale REF: 13-4 TOP: Economies of scale REF: 13-4 TOP: Economies of scale REF: 13-4 TOP: Constant returns to scale REF: 13-4

NAT: MSC: 65. ANS: NAT: MSC:

Analytic Analytical C Analytic Definitional

LOC: Costs of production PTS: 1 DIF: 1 LOC: Costs of production

TOP: Constant returns to scale REF: 13-4 TOP: Diseconomies of scale