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.

Labor (workers per day) Total product (bicycles per day) 0 0 1 4 2 10 3 18 4 25 5 30 The above table shows the relationship between labor input and total product of producing bicycles. The marginal product of the 5th worker is equal to     5 bicycles.     6.25 bicycles.     30 bicycles.     6 bicycles.

If the cost of an oven is $500, what is the marginal product per dollar spent on capital for the second oven? Read again before you answer. Labor Total Product Capital (ovens) (workers) (cakes) 8 6,000 8 10,000 8 13,000 Type your numeric answer and submit 123

(A) With P = 20, W = 25 and TFC = 500: Labor Output (Q) (L) 5 10 25 35 50 60 10 25 60 70 80 90 Marginal Physical Product of AVC=VC/Q ATC=TC/Q Labour (MPPL) 2 3 4 2 2 1 Average Physical Cost Product of (TC) (VC) Labour (APPL) 2 2.5 2.4 2 1.6 1.5 MPPL = Change in Q / Change in L APPL=Q/L TC = TFC + VC VC=W* L MC = Change in TC / Change in Q Total Variable Marginal Average Cost Variable 625 750 1125 1835 1750 2000 125 250 625 875 1250 1500 Cost (MC) 15 10 6 10 15 30 Average Total Cost Cost (AVC) (ATC) 12.50 10.00 10.42 12.50 15.63 16.62 62.5 30.00 18.75 26.21 21.88 22.22 Based on this table, answer this: 1. How much output will this firm produce? If the price of output increases to $30, how does your answer change? 2. If the productivity of labor increases by 10% (all else equal), how much more labor will the firm hire? 3. Below what price will this firm decide to produce zero units of output? (i.e. shut down)

Fill in the space (d) in the table below associated with the firm William Perry, Inc., that delivers refrigerators in the Chicago area, using the two inputs of labor and trucks. Number of Amount of Trucks Labor 2 2 2 2 2 2 2 0 1 2 3456 Total Output 0 75 (c) 380 (f) Average Product of Labor (a) (b) 100 (d) (e) 75 Marginal Product of Labor 100 50 (g) 0

The Production Function for Wilson Company Economists at the Wilson Company are interested in developing a production function for fertilizer plants. They collected data on 15 different plants that produce fertilizer  PLANT         OUTPUT (TONS)                CAPITAL ($)               LABOUR (HOURS) 1                             605.3                                18,891                                700.2 2                             566.1                               19,201                                651.8 3                              647.1                               20,655                                822.9 4                              523.7                                15,082                               650.3 5                              712.3                                20,300                               859.0 6                              487.5                                16,079                               613.0 7…