Question

# 4.) Exhibit 7-8 Costs schedules for producing pizza Pizzas Fixed Cost Variable Cost Total Cost Marginal...

4.) Exhibit 7-8 Costs schedules for producing pizza

 Pizzas Fixed Cost Variable Cost Total Cost Marginal Cost 0 \$ \$ \$ \$ 1 5 2 13 3 10 4 100 140 5 20 6 85 7 215

By filling in the blanks in Exhibit 7-8, the total cost of producing 3 pizzas is shown to be equal to:

 a \$100.
 b \$105.
 c \$113.
 d \$123.
 e \$23.

6.) Constant returns to scale exist over the range of output for which the long-run average cost is:

 a neither rising or falling.
 b falling.
 c rising.
 d none of these.

Exhibit 7-1 Production of pizza data

 Workers Pizzas 0 0 1 4 2 10 3 15 4 18 5 19

8.) Exhibit 7-1 shows the change in the short-run production of pizzas as more workers are hired. The table shows the marginal product of the labor input is decreasing with the hiring of the third worker. A possible reason for this diminishing marginal product is:

 a decreased wages.
 b increases in plant size.
 c decreases in fixed cost.
 d increased division of labor as additional workers are hired.
 e decreases in labor productivity.

11.) In the long run, total fixed cost will:

 a remain constant.
 b increase.
 c decrease.
 d not exist by definition.

15.) Exhibit 7-12 Cost schedule for producing pizza

 Pizzas Fixed Cost Variable Cost Total Cost 0 \$ \$ \$ 1 48 2 17 3 27 4 78 5 40 6 64 7 80

By filling in the blanks in Exhibit 7-12, the AVC of 3 pizzas is shown to be equal to:

 a \$10.
 b \$13.33.
 c \$9.
 d \$22.33.
 e \$40.

16.) The short run is a period of time:

 a in which a firm uses at least one fixed input.
 b that is long enough to permit changes in the firm's plant size.
 c in which production occurs within one year.
 d in which production occurs within six months.

 Pizzas Fixed costs\$ Variable costs \$ Total costs \$ (FC + VC) Marginal costs \$ ( additional cost) 0 100 100 1 100 5 105 5 2 100 13 113 8 3 100 23 123 10 4 100 40 140 17 5 100 60 160 20 6 100 85 185 25 7 100 115 215 30 The total cost of producing 3 pizzas is equal to \$123. 6) a neither rising nor falling. The long run average cost is constant. 8 e) Diminishing productivity as more and more laborers become less productive as other inputs are held constant. 11 d) all costs are variable in the long run.

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