Chapter 13 ala turn in

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School

Grand Valley State University *

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Course

211

Subject

Economics

Date

Apr 3, 2024

Type

docx

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3

Uploaded by CountEelMaster1154

ECO 211 Active Learning Assignment Chapter 13 1. Draw the following cost curves (typical shapes) on the graph below: Average Variable Cost (AVC) Average Total Cost (ATC) Marginal Cost (MC) $ $ Q 2. Where does the MC intersect the ATC curve? Explain. What is significant about that point? The MC crosses the ATC at the minimum ATC. 3. Complete the chart below. Round to the nearest dollar. Quantity FC VC TC AFC AVC ATC MC 0 $250 $0 $250 *** *** *** *** 1 $250 $100 $350 $250 $100 $350 $100 2 $250 $190 $440 $125 $95 $220 $90 3 $250 $270 $520 $83 $90 $173 $80 4 $250 $340 $590 $63 $85 $148 $70 5 $250 $450 $700 $50 $90 $140 $110 6 $250 $580 $830 $42 $97 $139 $130 7 $250 $730 $980 $36 $104 $140 $150 8 $250 $930 $1180 $31 $116 $148 $200 a. At what output level does diminishing marginal product set in? 5 units b. Which is the output level that is the most efficient? 6 units 4. Define Diminishing Marginal Product. When some resources are fixed and more variable resources are added AVC
ECO 211 Active Learning Assignment Chapter 13 5. The equilibrium rent on office space has just increased by $500/month. Determine the effects on accounting profit and economic profit if a.   you rent your office space Both accounting and economic profit will decline when explicit costs decrease. c. you own your office space because explicit costs do not change, only implicit costs increase when you own your own office space 6. Sandra's Sweaters' production function is shown in the below table. Sandra rents three knitting machines for $30 a day each and hires workers at a wage rate of $40 a day. If Sandra produces 18 sweaters per day, what is her average total cost? Labor (workers per day) Output (units per day) 0 0 1 13 2 18 3 22 4 24 5 25 Fixed costs = 90 Variable costs 18 = 80 Total Costs 18 = = $170 ATC = = $9.44 7. The below table shows the total product of producing baseball hats. At what level of output does the marginal cost of baseball hats start to rise? Labor (workers per day) Total product (hats per day) 0 0 1 4 2 10 3 18
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