Principles of Microeconomics (MindTap Course List)
8th Edition
ISBN: 9781305971493
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Chapter 13, Problem 2CQQ
To determine
Diminishing marginal product.
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Diminishing marginal product explains why, as a firm’s output increases.a. the production function and total-cost curve both get steeper.b. the production function and total-cost curve both get flatter.c. the production function gets steeper, while the total-cost curve gets flatter.d. the production function gets flatter, while the total-cost curve gets steeper.
The law of diminishing marginal returns states:
Select one:
a. As a firm uses more of a variable factor of production, total product (TP) eventually decreases.
b. As the size of a plant increases, marginal product (MP) eventually decreases.
c. As a firm uses more of a variable factor of production, its average cost (AC) eventually decreases.
d. As a firm uses more of a variable factor of production, with a given quantity of the fixed factor of production, the MP of the variable factor eventually decreases.
Jane’s Juice Bar has the following cost schedules:a. Calculate average variable cost, average total cost, and marginal cost for eachquantity.b. Graph all three curves. What is the relationship between the marginal-cost curveand the average-total-cost curve? Between the marginal-cost curve and the averagevariable-cost curve? Explain.
Chapter 13 Solutions
Principles of Microeconomics (MindTap Course List)
Ch. 13.1 - Prob. 1QQCh. 13.2 - Prob. 2QQCh. 13.3 - Prob. 3QQCh. 13.4 - Prob. 4QQCh. 13 - Prob. 1CQQCh. 13 - Prob. 2CQQCh. 13 - Prob. 3CQQCh. 13 - Prob. 4CQQCh. 13 - Prob. 5CQQCh. 13 - Prob. 6CQQ
Ch. 13 - Prob. 1QRCh. 13 - Prob. 2QRCh. 13 - Prob. 3QRCh. 13 - Prob. 4QRCh. 13 - Prob. 5QRCh. 13 - Prob. 6QRCh. 13 - Prob. 7QRCh. 13 - Prob. 8QRCh. 13 - Prob. 1PACh. 13 - Prob. 2PACh. 13 - Prob. 3PACh. 13 - Prob. 4PACh. 13 - Prob. 5PACh. 13 - Prob. 6PACh. 13 - Prob. 7PACh. 13 - Prob. 8PACh. 13 - Prob. 9PACh. 13 - Prob. 10PA
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- A firm has the production function f(x, y) = x®y0.3, where a>0.7. This firm has Select one: a. decreasing returns to scale and increasing marginal product for factor x and y. b. None of the above. c. increasing returns to scale and diminishing marginal product of factor x. d. constant returns to scale. e. decreasing returns to scale and diminishing marginal products for factor y.arrow_forwardWhich one of the following statements about a firm’s cost curves is true? A. The average variable cost curve only includes explicit costs. B. Increases in input prices for variable factors of production will shift the firm’s marginal cost curve up and also shift the firm’s total variable cost curve up. C. Fixed costs only include implicit costs. D. An increase in the price of a fixed factor of production will shift all of the firm’s cost curves up. E. A competitive firm’s short run supply curve is always identical at all points to its short run marginal cost curve.arrow_forwardThe 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.arrow_forward
- 1a. Define average product and marginal product. Briefly explain reasons for a diminishing marginal product. b. What are three stages of production? Which stages reflect a firm’s observed behavior versus experimental situation? Briefly justify your answer.arrow_forwardA commercial fisherman notices the following relationship between hours spent fishing and the quantity of fish caught: a. What is the marginal product of each hour spentfishing? b. Use these data to graph the fisherman’sproduction function. Explain its shape.c. The fisherman has a fixed cost of $10 (his pole).The opportunity cost of his time is $5 per hour.Graph the fisherman’s total-cost curve. Explainits shape.arrow_forwardWhen plotting marginal and average cost curves, the cost curve always crosses the cost curve at its Select one: a. average fixed; marginal; minimum b. marginal; average variable; maximum c marginal; average total; minimum d. average variable; marginal; maximumarrow_forward
- The government imposes a $1,000 per year license fee on all pizza restaurants. As a result, which of the following cost curves shift, and why or why not?a. Average total cost.b. Marginal Cost.c. Average Variable Cost.arrow_forwardWhich of the following statements correctly explains the average cost and the marginal cost of production? a. Marginal cost is equal to the profit- maximising price set by a firm that produces a differentiated good. b. Average cost is the vertical intercept of the total cost curve. C. Marginal cost is calculated as the total cost divided by the quantity d. Average cost is at its minimum when it is equal to marginal cost. e. Marginal cost is always higher than average cost.arrow_forwardThe cost curve for producing widgets passes through the following points and is piecewise linear in between. Solve, a. What is the fixed cost of producing 600 widgets? b. What is the variable cost of producing 600 widgets? c. What is the cost per unit if only 400 widgets are produced?arrow_forward
- Average cost curves (except for average fixed cost) tends to be u-shaped , decreasing and then increasing. Marginal cost curve have the same shape, though this may be harder to see since most of marginal cost curve is increasing . Do you think that average and marginal cost curve have the same general shape and why ?arrow_forwardWhich of the following best describes total fixed cost?a.The change in total cost when one additional unit of output is produced.b.Total cost divided by the quantity of output produced.c.Total variable cost divided by the quantity of output produced.d.Cost that do not vary as output varies.arrow_forwardAverage total cost, average variable cost marginal cost and marginal product b. The relationship between marginal product and marginal cost is reciprocal or opposite. Why is it so? Explain.arrow_forward
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