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- 6. Define Minimum Average Cost and Efficient Scale.1. Explain the Theory of Production in Microeconomics. 2. Differentiate labor-intensive and capital-intensive technology. 3. Illustrate and discuss the 3 Stages of Production: Increasing Returns, Diminishing Returns, and Negative Returns.7. Define Economies of Scale, Diseconomies of Scale, Constant returns to scale.
- 1 . Costs in the short run versus in the long run Ike’s Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is considering expanding production to two or even three factories. The following table shows the company’s short-run average total cost (SRATC) each month for various levels of production if it uses one, two, or three factories. (Note: Q equals the total quantity of bikes produced by all factories.) Average Total Cost (Dollars per bike) Number of Factories Q = 200 Q = 300 Q = 400 Q = 500 Q = 600 1 440 280 240 320 480 800 2 620 380 240 240 380 620 3 800 480 320 240 280 440 Suppose Ike’s Bikes is currently producing 100 bikes per month in its only factory. Its short-run average total cost is ? per bike. Suppose Ike’s Bikes is expecting to produce 100 bikes per month for several years. In this case, in the long run, it would choose to produce bikes using (one factory, two…6. The price for the effort and energy of the entrepreneur used in production is part of the _____. a. Real cost b. Nominal cost c. Opportunity cost d. Explicit costs3. What name is given to expenditures that must be made before production starts and that do not change regardless of the level of production? A. Marginal costs B. Diseconomies of scale C. Variable costs D. Fixed costs I
- 5. Costs in the short run versus in the long run Ike’s Bikes is a major manufacturer of bicycles. Currently, the company produces bikes using only one factory. However, it is considering expanding production to two or even three factories. The following table shows the company’s short-run average total cost (SRATC) each month for various levels of production if it uses one, two, or three factories. (Note: Q equals the total quantity of bikes produced by all factories.) Number of Factories Average Total Cost (Dollars per bike) Q = 25 Q = 50 Q = 75 Q = 100 Q = 125 Q = 150 1 440 320 240 320 480 720 2 580 400 240 240 400 580 3 720 480 320 240 320 440 Suppose Ike’s Bikes is currently producing 125 bikes per month in its only factory. Its short-run average total cost is................................$ per bike. Suppose Ike’s Bikes is expecting to produce 125 bikes per month for several years. In this case, in the long run, it would choose to…4. Refer to Figure 1. Curve 3 is Outdoor Equipment's Select one: a. Average variable cost curve. b. Average total cost curve. c. Average fixed cost curve. d. Marginal cost curve.1. What is the formula to calculate profits? 2. Define Explicit and Implicit Costs. 3. Define Economic Profit and Accounting Profit. 4. Define Production Function, Marginal Product, and Diminishing Marginal Product. 5. Define Fixed Costs and Variable Costs. 5. Provide the formula/calculation for the following costs: Average Total Cost, Average Fixed Cost, Average Variable Cost, Marginal Cost. 6. Define Minimum Average Cost and Efficient Scale. 7. Define Economies of Scale, Diseconomies of Scale, Constant returns to scale.
- 1. Factors that increase productivity and explain each 2. Explain what is Short run and Long run Period by giving an example. 3. Describe common productivity killers and then find strategies to help eradicate the specific problems 4. What is Production Function? 5. What is Marginal Product? 6. Diminishing Marginal Product? 7. What are cost? 8. Explain total revenue, total cost, profit with a given example 9. Differentiate explicit and implicit costs 10. Differentiate Economic profit from accounting profit and example scenario 11. Why is Productivity important in economics? Give an example scenario 12. Describe Productivity in Economics. Give and example scenario 13. Using the economic definition of productivity can help us to determine how productive we really are. Explain it’s impact on wages, Role of technology and Relationships with consumption.1. How does fixed cost affect marginal cost? Why is this relationship important? 2. Is it possible for total utility to increase while marginal utility diminishes? Explain. 3. Define economies of scale and explain why they might arise. Define disecononies of scale and explain why they might arise.1) In short, what does the production function describe? 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. 2)What is the significance of the point at which Marginal Revenue and Marginal Cost curves intersect on a graph? A. total revenue is equal to variable cost. B. total revenue is equal to fixed cost. C. total revenue is equal to total cost. D. profit is maximized.
