Macroeconomics
13th Edition
ISBN: 9780134735696
Author: PARKIN, Michael
Publisher: Pearson,
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Chapter 10, Problem 21APA
To determine
The reason for differencesin countries chosen for designing and manufacturing a product.
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QUESTION 9
John lives in the small island nation of Vanuatu, and is a producer in the perfectly competitive market for galip nuts. A summary of some
of his costs, which are given in the local currency (the "vatu"), is shown below.
Quantity (kg of galip nuts)
0
30
60
90
120
150
Total Fixed Cost TFC (vatu)
5600
5600
5600
5600
5600
5600
Total Variable Cost TVC (vatu)
0
640
1520
2640
4800
9120
If John's profit-maximising quantity is 90kg of galip nuts, what is the marginal revenue per kilogram of galip nuts at this profit maximising
quantity? Answer to the nearest whole number.
Independent University, Bangladesh
ECN-201: Principles of Microeconomics
Spring 2021
Final Assignment
1. Use the table below to answer the following questions:
Costs
Total Cost Marginal
Cost
Revenues
Price ($)
Quantity
Produced
Marginal
Revenue
Total
Quantity
Demanded
Revenue
170
160
150
140
100
140
184
2
3
3
230
280
4
5
4
5
130
120
110
100
95
335
395
6
7
8
7
475
8
575
a. Find the average fixed cost and average variable cost for the 4" unit of output.
b. How much does profit change if 6 units are sold instead of 5?
Q9
ABC is a small business producing instructional modules for disabled children in public
schools. The modules produced by ABC are not differentiated and the market price is
$1,300 per module. ABC operates in a small office that rents for $600 a month and leases
computer equipment that costs $480 per month. The chart lists other cost of production.
Output (Q) Fixed
(Instructional Cost
Modules
Per month)
0
1
2
3
4
5
6
7
8
9
10
Variable Total Average Average
Cost
Cost
Fixed
Variable
(TC)
Cost
(AFC)
(FC) (VC)
1,080
400
1,350
1,900
2,500
4,100
5,400
7,300
1,480
2,430
4,280
10,880
216
135
Cost
(AVC)
475
Average
Total
Cost
(ATC)
965
Marginal
Cost
(MC)
400
450
700
1) Complete the chart and plot the following graphs: AFC, AVC, ATV, MC. Be sure
to label axis and graphs.
2) How many instructional modules ABC will produce, assuming it is profit-
maximizer? Explain your answer and show that on the graph.
3) Determine ABC's profit and shade the profit on the graph.
4) Given the level of ABC's…
Chapter 10 Solutions
Macroeconomics
Ch. 10.1 - Prob. 1RQCh. 10.1 - Prob. 2RQCh. 10.1 - Prob. 3RQCh. 10.1 - Prob. 4RQCh. 10.1 - Prob. 5RQCh. 10.2 - Prob. 1RQCh. 10.2 - Prob. 2RQCh. 10.2 - Prob. 3RQCh. 10.2 - Prob. 4RQCh. 10.3 - Prob. 1RQ
Ch. 10.3 - Prob. 2RQCh. 10.3 - Prob. 3RQCh. 10.4 - Prob. 1RQCh. 10.4 - Prob. 2RQCh. 10.4 - Prob. 3RQCh. 10.4 - Prob. 4RQCh. 10.5 - Prob. 1RQCh. 10.5 - Prob. 2RQCh. 10.5 - Prob. 3RQCh. 10 - Prob. 1SPACh. 10 - Prob. 2SPACh. 10 - Prob. 3SPACh. 10 - Prob. 4SPACh. 10 - Prob. 5SPACh. 10 - Prob. 6SPACh. 10 - Prob. 7SPACh. 10 - Prob. 8APACh. 10 - Prob. 9APACh. 10 - Prob. 10APACh. 10 - Prob. 11APACh. 10 - Prob. 12APACh. 10 - Prob. 13APACh. 10 - Technological and Economic Efficiency Use the...Ch. 10 - Prob. 15APACh. 10 - Prob. 16APACh. 10 - Prob. 17APACh. 10 - Prob. 18APACh. 10 - Prob. 19APACh. 10 - Prob. 20APACh. 10 - Prob. 21APACh. 10 - Prob. 22APACh. 10 - Prob. 23APA
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- Many films in the United States file for bankruptcy every year, yet they still continue operating. Why would they do this instead of completely shutting down?arrow_forwardB. The following table shows the quantity of leather purses, total cost, total revenue andmarginal revenue for a Caribbean manufacturer of leather products.Quantity of purses Total cost Total Revenue Marginal revenue Average revenue Average cost Marginal cost 0 8 0 - 1 9 8 8 2 10 16 8 3 11 24 8 4 13 32 8 5 19 40 8 6 27 48 8 7 37 56 8 Table 2.Copy the table to your booklet and complete it to show, the average revenue, average cost…arrow_forward1. A firm has three different production facilities, all of which produce the same product. Whilereviewing the firm’s cost data, Ron, a manager, discovered that one of the plants has a higher averagecost than the other plans and suggests closing this plant. Another manager, Jack, notes that the high-cost plant has high fixed costs but that the marginal cost in this plant is lower than in the other plants.He says that the high-cost plant should not be shut down but should expand its operations. Who isright? 2. Should a firm shut down if its weekly revenue is $1,000, its variable cost is $500, and its fixed cost is$800, of which $600 is avoidable if it shuts down? Explain.arrow_forward
- the choices for the three "quantity" column are (6000, 10400, 12000). the choices for the "price: column are (20,28,34,50) the choices for profit are (negative,prositve, zero) the choices for long run decision are (exit the industry, stay in business, stay or exit) please also do the rest of the questions. thankyouuuuarrow_forwardGraph the ATC and MC below and explain output ATC MC 0 - 10 10 18 2 20 10 1 30 7 0.5 40 5.375 1.5 50 4.6 2 60 4.166667 2.5 70 3.928571 3.3 80 3.85 3.2 90 3.777778 5 100 3.9 9 110 4.363636 10 120 4.833333arrow_forwardOutput (Concession Stand Items) Number of Workers Employed Per Day Price of Labor Per Worker Per Day Total Variable Cost of Labor Total Fixed Costs Per Day Total Cost Per Day Average Price of Concession Stand Items Total Revenue Profit Average Variable Cost Average Fixed Cost Average Total Cost Marginal Cost Marginal Revenue 0 0 $120 0 $2,000 2000 $8.00 0 -2000 0 0 0 0 8 100 2 $120 240 $2,000 2240 $8.00 800 -1640 2.40 20 22.40 2.40 8 400 4 $120 480 $2,000 2480 $8.00 3200 720 1.20 5 6.20 0.80 8 750 6 $120 720 $2,000 2720 $8.00 6000 3280 0.96 2.66 3.62 0.67 8 900 8 $120 960 $2,000 2960 $8.00 7200 4240 1.07 2.22 3.29 1.60 8 1,025 10 $120 1200 $2,000 3200 $8.00 8200 5000 1.17 1.95 3.12 1.92 8 1,125 12 $120 1440 $2,000 3440 $8.00 9000 5560 1.28 1.77 3.06 2.40…arrow_forward
- Output (Concession Stand Items) Number of Workers Employed Per Day Price of Labor Per Worker Per Day Total Variable Cost of Labor Total Fixed Costs Per Day Total Cost Per Day Average Price of Concession Stand Items Total Revenue Profit Average Variable Cost Average Fixed Cost Average Total Cost Marginal Cost Marginal Revenue 0 0 $120 0 $2,000 2000 $8.00 0 -2000 0 0 0 0 8 100 2 $120 240 $2,000 2240 $8.00 800 -1640 2.40 20 22.40 2.40 8 400 4 $120 480 $2,000 2480 $8.00 3200 720 1.20 5 6.20 0.80 8 750 6 $120 720 $2,000 2720 $8.00 6000 3280 0.96 2.66 3.62 0.67 8 900 8 $120 960 $2,000 2960 $8.00 7200 4240 1.07 2.22 3.29 1.60 8 1,025 10 $120 1200 $2,000 3200 $8.00 8200 5000 1.17 1.95 3.12 1.92 8 1,125 12 $120 1440 $2,000 3440 $8.00 9000 5560 1.28 1.77 3.06 2.40…arrow_forwardOutput (Concession Stand Items) Number of Workers Employed Per Day Price of Labor Per Worker Per Day Total Variable Cost of Labor Total Fixed Costs Per Day Total Cost Per Day Average Price of Concession Stand Items Total Revenue Profit Average Variable Cost Average Fixed Cost Average Total Cost Marginal Cost Marginal Revenue 0 0 $120 0 $2,000 2000 $8.00 0 -2000 0 0 0 0 8 100 2 $120 240 $2,000 2240 $8.00 800 -1640 2.40 20 22.40 2.40 8 400 4 $120 480 $2,000 2480 $8.00 3200 720 1.20 5 6.20 0.80 8 750 6 $120 720 $2,000 2720 $8.00 6000 3280 0.96 2.66 3.62 0.67 8 900 8 $120 960 $2,000 2960 $8.00 7200 4240 1.07 2.22 3.29 1.60 8 1,025 10 $120 1200 $2,000 3200 $8.00 8200 5000 1.17 1.95 3.12 1.92 8 1,125 12 $120 1440 $2,000 3440 $8.00 9000 5560 1.28 1.77 3.06 2.40…arrow_forwardTotal Revenue Total C ost Proit/Loss/ Price( P) Quantity (TR) (TC) Break Even $3 5. 2 9. 3 8. 4 11 5. 15 6. 21 30 8. 42 6. 60 10 85 Yummy Cupcakes is a purely competitive firm. The firm's costs are shown in the table above. The market price is $5 (USE THIS TO FILL IN THE PRICE COLUMN) When Yummy Cupcakes produces 1 cupcakel Q-1).the firm : O breaks even incurs a loss O earns profits will shutdownarrow_forward
- Total Quantity Fixed Costs (FC) Variable Costs (VC) Costs of TC) Apples 0 80 1 80 117 197 332 2 80 252 485 3 4 80 656 845 80 765 6 80 1052 1197 1277 1440 1520 8 80 7arrow_forwardTopic A Problem: While on vacation, you go to a miniature golf course on a weekday and notice no other customers there while you golf. Why do you think a miniature golf course would stay open during the week when it seems like the revenue from so few customers could not possibly cover the costs of running the golf course? What is an example of another business that stays open even when it's slow, and their revenue does not seem like it could cover their costs?arrow_forward16. In the accompanying table, you are given information about two firms that compete in a price-taker market. Assume that fixed costs for each firm are $20. a. Complete the table. b. What is the lowest price at which firm A will produce? c. How many units of output will it produce at that price? (Assume that it cannot produce fractional units.) d. What is the lowest price at which firm B will produce? e. How many units of output will it produce? f. How many units will firm A produce if the market price is $20?arrow_forward
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