Suppose Jackie runs an apple farm. Jackie has one fixed factor of production. Suppose that Jackie's short run average total cost curve is text-book typical. Suppose that this cost curve's minimum value occurs when she produces 120 tons of apples per year. Which one of the following is true? When Jackie produces 120 tons of apples per year, her short run marginal cost equals her short run average total cost. O When Jackie produces 200 tons of apples per year, her short run marginal cost is smaller than her short run average total cost. When Jackie produces 90 tons of apples per year, her short run marginal cost is greater than her short run average total cost. When Jackie produces 120 tons of apples per year, her short run variable cost equals her short run average total cost.

What is a diseconomy of scale and what is an economy of scale? What modifications would you make to your current home gardening production if you intended to achieve economies of scale? Clarify why

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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

The LEGO Architecture Collection includes three items: the White House Model Building Kit (at $80 per kit), the U.S. Capitol Building Kit (at $40 per kit), and the Mar-a-LEGO Club Building Kit (at $20.24 per kit; empty classified document folders are extra). Total costs of production for different quantities of each item are given below. a. WHITE HOUSE Output per day 0 100 200 300 400 500 600 White House U.S. Capitol Total cost Mar-a-LEGO 1600 5000 11000 18000 27000 40000 55000 U.S. CAPITOL Output per day 0 10 20 30 40 50 60 Total cost 100 400 750 1120 1510 1920 2350 MAR-A-LEGO Output per day 0 100 200 300 400 500 600 If LEGO's goal is profit maximization and the cost of production schedules cannot be altered, what quantity of each item should be produced in the short run? Total cost 2000 3500 5500 8000 11000 14200 15000 b. Above what market price (to the nearest penny) should LEGO begin producing Mar-a-LEGO kits? That is, what is the "shutdown price" for Mar-a-LEGO kits?

The figure at right illustrates short-run cost curves for a firm. Based on this figure, which of the following is true? O A. A is the total cost curve, B is the marginal cost curve, and C is the total fixed cost curve. O B. A is the average variable cost curve, B is the total fixed cost curve, and C is the average total cost curve. O C. A is the total cost curve, B is the total variable cost curve, and C is the total fixed cost curve. O D. A is the total cost curve, B is the total variable cost curve, and C is the marginal cost curve. O E. A is the average variable cost curve, B is the average total cost curve, and C is the marginal cost curve. Quantity с

4. Sherry runs a dog grooming business. She has rent of $5,000 per month and must have an assistant to work with her to keep things going. The assistant costs $3,500 per month and supplies cost $1,500 per month. Sherry also has a storage unit where she keeps equipment that she might need at a cost of $1,000 per month. What should Sherry do under the following scenarios? Be sure to show your calculations. a. Sherry has monthly revenue of $8,000 b. Sherry has monthly revenue of $5,000 c. Sherry decides to shut down d. Of the alternatives presented above, which one presents the best outcome? Explain.

3. The Chipper Cookie Company's output is given by the Cobb-Douglas Production function P = 120L0.7 K0.3, where P is the number of units produced when Lis the amount spent on labor and K is the amount spent on capital. a. What is the production if L = 600 and K = 600? b. Find the marginal productivities. c. Evaluate the marginal productivities with L= 600 and K = 600. d. Interpret the meanings of the marginal productivities found in part c. e. If their budget is $1200 then there is a constraint L+ K = 1200. Use Lagrange multipliers (^) to find the values of L and K that will maximize production and find the maximum production f. Find and interpret 2 for this problem. only need part e and f!

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.

The following table gives you information on the total cost of Mac’s ice cream production: b. Compute the average total cost at each level of output. c. Compute the marginal cost at each level of output. d. At which level of output does the average total cost start increasing? Explain the increasing average total cost and its relationship with the marginal cost.