curve II is the

Learning by doing is represented by   A. no change in the average total cost curve.   B. an increase in the average total cost curve.   C. a decrease in the average total cost curve.   D. an increase in the average total cost curve and a decrease in the marginal cost curve

. With the aid of a clearly labelled diagram illustrate;i.The least cost criterion for cost minimization ii.At what point does the least cost combination of inputs occur? iii.What are the optimal solutions to cost minimization?

5. True, false, or uncertain? Explain briefly but specifically. a. A cost function exhibits diseconomies of scale if the marginal cost rises as output decreases. b. Short run average cost is always at least as much as long run average cost.

4.The Marginal Cost Curve is shaped like a Nike swoosh. graph. 5.The Marginal Cost Curve crosses the Average Total Cost curve and Average Variable Cost curves at the lowest point. graph.

QUESTION 2 Figure and Table: Variable, Fixed, and Total Costs Total cost $2,500 2,000 1,500 1,000 500 Points on Graph A B C E 0 G H I A B₁ Reference: Ref 6-11 с 20 1 1 1 40 60 80 100 Quantity of wheat (bushels) DEFGH Total cost, TC Quantity of Labor (workers), L 0 1 2 3 4 6 8 Quantity of Wheat (bushels), Q 0 PORTARI 19 36 51 64 75 84 91 96 Variable Cost, VC $ 0 200 400 600 800 1,000 1,200 1,400 1,600 Fixed Cost, FC $400 400 400 400 400 400 400 400 400 Total Cost, TC $ FC + VC 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 (Figure and Table: Variable, Fixed, and Total Costs) The marginal cost of increasing production from 0 to 19 bushels of wheat is: OA. $22.22. B. $11.76. OC. $10.53 D. $11.11. OE. $23.53.

question # 2

Use the graph from class to find 1. Marginal Cost at 100; 2. Total Cost at 100; 3. Variable Cost at 100; 4. Fixed Cost at 100. Construct your own graphs similar to the ones from class. Use your diagram to show . 5. Whether or not reducing the quantity produced will always reduce the total cost. 6. Whether or not reducing the quantity produced will always reduce the average total cost. 7. Whether or not reducing the quantity produced will always reduce the marginal cost. 59 30 10- 5 MC ATC AVC 100 0

1.  When Fixed Cost change, which of the following other costs will change?  Explain why you selected the costs you did.   Variable Cost Total Cost Average Total Cost Average Variable Cost Average Fixed Cost Marginal Cost   2.  When Variable Cost change, which of the following other costs will change?  Explain why you selected the costs you did.   Fixed Cost Total Cost Average Total Cost Average Variable Cost Average Fixed Cost Marginal Cost   3.  What assumption is made concerning short-run production that causes the short-run cost curves to have their typical shapes?

2. You are thinking about setting up a lemonade stand. The stand itself costs $200. The ingredients for each cup of lemonade cost $0.50. a. How much is your fixed cost of doing business? How much is your variable cost per cup? b. Construct a table showing your total cost, average total cost, and marginal cost for output levels varying from 0 to 10 gallons. (Hint: There are 16 cups in a gallon)