Econ Micro (book Only)
6th Edition
ISBN: 9781337408066
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 7, Problem 9P
To determine
To determine:
The values of
Concept Introduction:
Average variable cost (avc) = total variable cost (tvc)/quantity
Average total cost (atc) = total cost (tc)/quantity
Marginal cost (mc) =change in total cost/change in quantity
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Microeconomics - Production FunctionA firm produces shoes using labor (L) and machinery (K) as factors of production. Its production function is Q = K1/3 * L2/3. Answer:(a) is the marginal product of labor (MPL) decreasing?b) is the average product of labor (APL) decreasing?c) what is the relationship between the average product (AP) and marginal product (MP) curves?d) what type of returns to scale does Q exhibit?
The accompanying table shows the total daily output for a firm producing specialty cakes and operating with a fixed
amount of capital. The cost of labour is $200 per unit per day and the fixed cost of the capital is $1500 per day.
Click the icon to view the table.
24
28
8
12
16
20
Complete the last four columns of the table.
Units of Labour
Total Output
(per day)
(per day)
4
200
24
2450
28
2510
500
1200
1950
2330
2450
$ 1500
2510
$ 4800
$ 1500 $ 5600
TFC
TVC
$6300
$ 7100
TC
MC
$ 2.67
$ 1.14
$ 1.07
$ 2.11
$6.67
$ 13.33
AFC
$7.5
$3
$ 1.25
$ 0.77
$ 0.64
$ 0.61
AVC
$4
$3.2
$2
$ 1.64
$ 1.72
$ 1.96
ATC
$ 11.5
$6.2
$ 3.25
$ 2.41
$ 2.36
$ 2.57
$ 2.23
$0.6
(Round your responses to the nearest cent.)
b. Assuming that labour is only hired in increments of 4 units, what is this firm's capacity level of output?
per day
$ 2.83
Question 9
When Marginal Product of Labor intersects the Average product of labor, minimum
average product of labor obtains at the intersection.
True
False
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- Paper:Mate: gorlain 15. A company is planning to manufacture mountain bikes. The fixed monthly cost will be $100,000 and it will cost $100 to produce each bicycle. Write the cost function, C, of producing x mountain bikes. а. b. Write the average cost function, C, of producing x mountain bikes. Find C(500), Č(4000). c. d. What is the horizontal asymptote for the graph of the average cost function, C? Describe what this means in practical terms. МАТ 171 Section 2.6 Lab Page 2 of 4arrow_forward22. A firm uses labor and capital, (L,K), to produce an output. The hourly cost of labor is $10, and the hourly cost of capital is $50. Which of the following combinations of labor and capital hours of use represent points on the firm’s $100,000 isocost line? a) (10000, 2000) b) (2000, 10000) c) (1000, 1800) d) (1000, 1000)arrow_forwardLabor Output (workers per week) (units per week) 0 1 2 3 4 5 6 0 $24.92 $31.61 $50.00 சு & 8 8 8| 50 70 85 95 100 Use the above table to answer the following 2 questions. The table above gives a firm's total product schedule. Suppose labor is the only variable factor of production. The price of labor is $500 per week and total fixed costs are $600 per week. If 95 units are produced, the average total cost is O $6.31. $17.45. $26.32. $32.63. QUESTION 7 The table above gives a firm's total product schedule. Suppose labor is the only variable factor of production. The price of labor is $500 per week and total fixed costs are $600 per week. What is the marginal cost of producing the 90th unit? $10.00arrow_forward
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