Use the following table to work Problems 17 to 20. The table shows the production function of Jackie's Canoe Rides. Labor Output (rides per day) (workers per day) Plant 1 Plant 2 Plant 3 Plant 4 10 20 40 55 65 20 40 60 75 85 30 65 75 90 100 40 75 85 100 110 Canoes 10 20 30 40 Jackie's pays $100 a day for each canoe it rents and $50 a day for each canoe operator it hires. 19. a. On Jackie's LRAC curve, what is the average cost of producing 40, 75, and 85 rides a week? b. What is Jackie's minimum efficient scale?

How does fixed cost affect marginal cost? Why is this relationship important?

Continuing from Exercise 7.1, the films factory sits on land owned by the firm that it could rent for 30,000 per year. What was the films economic profit last year?

Are there fixed costs in the lung-run? Explain briefly.

Are fixed costs also sunk costs? Explain.

A firm had sales revenue of 1 million last year. It spent 600,000 on labor, 150,000 on capital and 200,000 on materials. What was the firms accounting profit?

What is the difference between a fixed input and a variable input?

What is a production function?

A common name for fixed cost is overhead. If you divide fixed cost by the quantity of output produced, you get average fixed cost. Supposed fixed cost is 1,000. What does the average fixed cost curve look like? Use your response to explain what spreading the overhead means.

Average cost curves (except for avenge fixed cost) tend to be U-shaped, decreasing and then increasing. Marginal cost curves have the same shape, though this may be harder to see since most of the marginal cost curve is increasing. Why do you think that average and marginal cost curves have the same general shape?