Egidio Binaccio designed an ancestry app that allows people to connect with long lost Italian relatives. Egidio notices the following relationship between the number of hours he schedules and the number of downloads (sales) he gets. Below is a production function, for Egidios current company set up. NUMBER of LABOUR TVC DOWNLOADS HOURS 10 6.50 20 11.00 30 30 14.50 40 17.50 50 20.50 60 23.75 70 27.50 80 32.00 90 37.50 100 44.50 110 53.50 120 65.00 130 79.50 140 97.50 TC MC AVC ATC Suppose the firm can hire all the labour it would ever want at the going wage of $8 per labour-hour. The firm's total fixed costs are $64 per day. A) B) C) Fill in the table showing total variable cost (TVC), total cost (TC), average variable cost (AVC), average total cost (ATC), and marginal cost (MC). [Remember: Marginal cost should be entered midway between rows of output.] On a graph with DOWNLOADS (per day) on the horizontal axis, draw the three "per-unit" cost curves, AVC, ATC, and MC. [Note that the marginal cost values from your table should be plotted on the graph midway between the corresponding units of output.] In a separate table calculate Marginal Product and Average Product and graph the Total Product Curve (the production function) given in the table above.
Egidio Binaccio designed an ancestry app that allows people to connect with long lost Italian relatives. Egidio notices the following relationship between the number of hours he schedules and the number of downloads (sales) he gets. Below is a production function, for Egidios current company set up. NUMBER of LABOUR TVC DOWNLOADS HOURS 10 6.50 20 11.00 30 30 14.50 40 17.50 50 20.50 60 23.75 70 27.50 80 32.00 90 37.50 100 44.50 110 53.50 120 65.00 130 79.50 140 97.50 TC MC AVC ATC Suppose the firm can hire all the labour it would ever want at the going wage of $8 per labour-hour. The firm's total fixed costs are $64 per day. A) B) C) Fill in the table showing total variable cost (TVC), total cost (TC), average variable cost (AVC), average total cost (ATC), and marginal cost (MC). [Remember: Marginal cost should be entered midway between rows of output.] On a graph with DOWNLOADS (per day) on the horizontal axis, draw the three "per-unit" cost curves, AVC, ATC, and MC. [Note that the marginal cost values from your table should be plotted on the graph midway between the corresponding units of output.] In a separate table calculate Marginal Product and Average Product and graph the Total Product Curve (the production function) given in the table above.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![Cost curves
Egidio Binaccio designed an ancestry app that allows people to connect with long lost Italian relatives.
Egidio notices the following relationship between the number of hours he schedules and the number of
downloads (sales) he gets. Below is a production function, for Egidios current company set up.
NUMBER of LABOUR
DOWNLOADS
HOURS
B)
10
C)
20
30
40
50
60
70
80
90
100
110
120
130
140
6.50
11.00
14.50
17.50
20.50
23.75
27.50
32.00
37.50
44.50
53.50
65.00
79.50
97.50
TVC
TC
MC
AVC
Suppose the firm can hire all the labour it would ever want at the going wage of $8 per labour-hour. The
firm's total fixed costs are $64 per day.
A)
ATC
Fill in the table showing total variable cost (TVC), total cost (TC), average variable cost (AVC),
average total cost (ATC), and marginal cost (MC). [Remember: Marginal cost should be entered
midway between rows of output.]
On a graph with DOWNLOADS (per day) on the horizontal axis, draw the three "per-unit" cost
curves, AVC, ATC, and MC. [Note that the marginal cost values from your table should be
plotted on the graph midway between the corresponding units of output.]
In a separate table calculate Marginal Product and Average Product and graph the Total Product
Curve (the production function) given in the table above.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fcb139406-52ff-4762-b8b2-aed922047229%2F663e119c-938f-43c3-94e1-62d627aecfce%2F0rdgbtl_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Cost curves
Egidio Binaccio designed an ancestry app that allows people to connect with long lost Italian relatives.
Egidio notices the following relationship between the number of hours he schedules and the number of
downloads (sales) he gets. Below is a production function, for Egidios current company set up.
NUMBER of LABOUR
DOWNLOADS
HOURS
B)
10
C)
20
30
40
50
60
70
80
90
100
110
120
130
140
6.50
11.00
14.50
17.50
20.50
23.75
27.50
32.00
37.50
44.50
53.50
65.00
79.50
97.50
TVC
TC
MC
AVC
Suppose the firm can hire all the labour it would ever want at the going wage of $8 per labour-hour. The
firm's total fixed costs are $64 per day.
A)
ATC
Fill in the table showing total variable cost (TVC), total cost (TC), average variable cost (AVC),
average total cost (ATC), and marginal cost (MC). [Remember: Marginal cost should be entered
midway between rows of output.]
On a graph with DOWNLOADS (per day) on the horizontal axis, draw the three "per-unit" cost
curves, AVC, ATC, and MC. [Note that the marginal cost values from your table should be
plotted on the graph midway between the corresponding units of output.]
In a separate table calculate Marginal Product and Average Product and graph the Total Product
Curve (the production function) given in the table above.
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