The Invisible Hand Property 2 suggests that: O profits across competitive industries will be identical. unprofitable industries will grow at the expense of other more profitable industries. O capital and labor can move only within a given industry. profits across competitive industries will be different.

The Invisible Hand Property 2 suggests that: O profits across competitive industries will be identical. unprofitable industries will grow at the expense of other more profitable industries. O capital and labor can move only within a given industry. profits across competitive industries will be different.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter10: Cost Functions

Section: Chapter Questions

Problem 10.1P

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How is division of labor defined? Select the correct answer below: The average cost of producing each O individual unit declines as total output increases. The production of a good or service is O split up into separate tasks performed by different workers. Human wants for goods and services O produced exceeds the available supply. Production decreases when labor specialization increases. O
Using the graph on the right, determine how the firm should change the quantity of the production factors in order to reduce the costs. The firm that is producing at point A can reduce its costs for producing 900 units by employing A. same capital and more labour. B. more capital and more labour. O C. less capital and more labour. D. more capital and less labour. E. less capital and the same labour. OO ỗ Q=1800 Q = 900 Isocost line OU
At a current level of production of 10,000 per day in its Garner plant, the marginal cost of producing a Jess Jones Sausage is 50 cents. If the average cost of production is 40 cents, at that level of production, Select one: a. the average cost of production will increase if output is increased above 10,000 sausages per day. O b. the average cost of production will remain 40 cents if output is increased above 10,000 sausages per day. c. the average cost of production will decline if output is increased above 10,000 sausages per day. O d. the average fixed cost of production will increase if output is increased above 10,000 sausages per day.
Do firms in a perfectly competitive market exhibit productive efficiency? O Productive efficiency, the economizing of society's scarce resources, is guaranteed for a perfectly competitive firm in the long run as well as in the short run. Productive efficiency, when P=Minimum ATC, is guaranteed in the long run. It is possible that a firm will produce its output at a unit cost higher than the lowest unit cost possible in the short run. Perfectly competitive firms will realize productive efficiency, the point where P=MC, in the long run but not in the short run. Perfectly competitive firms will never reach productive efficiency in the long run or the short run. It is too easy for firms to enter and exit the marketplace for this condition ever to be realized.
Betsy's Bangles produces and sells woven bracelets. The table shows information about the number of workers employed, daily bracelet production, and the marginal product of labor (MPL). Use this to answer the questions. You must calculate the bracelet values that are absent to answer the question. How many bracelets can be produced by 5 workers? bracelets from 5 workers: Workers 0 1 2 3 4 5 Bracelets 0 1 * 39 * * MPL www 1 26 12 8 4 bracelets
To sell one more unit of output, the seller must make one more and sell it for O less than the price at which the last unit sold the marginal revenue O the cost of the resources used to produce it O the same price as the last unit sold
Which of the following best explains why a firm would not stop producing if the loss is less than its fixed costs? O Fixed costs are paid regardless of whether something or nothing is produced, and the firm receives enough revenue per unit to cover ATC and some MC. O Fixed costs are paid regardless of whether something or nothing is produced, and the firm receives enough revenue per unit to cover ATC and some FC. O Fixed costs are paid regardless of whether something or nothing is produced, and the firm receives enough revenue per unit to cover AVC and some FC. O Fixed costs are paid regardless of whether something or nothing is produced, and the firm receives enough revenue per unit to cover AVC and some MC.
2. The Acme Anvil Company's output is given by the Cobb-Douglas Production function P = 60L2/3K1/3, where P is the number of anvils produced when L is the amount spent on labor and K is the amount spent on capital. a. What is the production if L = 150 and K = 150? b. Find the marginal productivities. c. Evaluate the marginal productivities with L = 150 and K = 150. d. Interpret the meanings of the marginal productivities found in part c. e. If their budget is $300 then there is a constraint L+ K = 300. Use Lagrange multipliers (2) to find the values of L and K that will maximize production and find the maximum production f. Find 2. 12| is called the marginal productivity of money and will give the number additional units produced for each dollar increase in the budget. Interpret 2 for this problem. Only need paVAS e and fl
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?
Suppose a production technology (A) is dominated by another production technology (B). Which of the statements below is correct? Only one is correct. O O O A company can still benefit from choosing technology A. It depends on the input factor prices Technology B is a flashy technology. Impressive, but not necessarily more profitable to choose than A. The company incurs unnecessarily high costs by choosing technology A over B. Technology A violates Norwegian law, while B is legal
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If You are the owner and only employee of a company that writes computer software that is used by gamblers to collect sports data. Last year you earned a total revenue of $90,000. Your costs for equipment, rent, and supplies were $60,000. To start this business you invested an amount of your own capital that could pay you a return of $40,000 a year. then your economic profit is Select one: a. 10,000 O b.-10,000 O c. -40,000 O d. 20,000 O e. 40,000