1, If the wage rate 'w' is $40 and the cost of capital is $40, calculate the average cost of producing 2,000 units in the long-run. 120- 110- AC = $ (round your answer to the nearest penny). 100- In the short-run, with the amount of capital fixed at 40 units, average total cost of 90- producing 2,000 units is V long-run average costs. 80- 70- 60- C (49,49) 50- A ---- B (40,40) 40- K= 40 C' 30- q = 3000 9 = 2,000 20A (28,28) 10- q = 1,000 20 :60 0- 20 40 60 80 100 120 140 Capital

1, If the wage rate 'w' is $40 and the cost of capital is $40, calculate the average cost of producing 2,000 units in the long-run. 120- 110- AC = $ (round your answer to the nearest penny). 100- In the short-run, with the amount of capital fixed at 40 units, average total cost of 90- producing 2,000 units is V long-run average costs. 80- 70- 60- C (49,49) 50- A ---- B (40,40) 40- K= 40 C' 30- q = 3000 9 = 2,000 20A (28,28) 10- q = 1,000 20 :60 0- 20 40 60 80 100 120 140 Capital

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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When fixed costs are ignored because they are irrelevant to a business's production decision, they are called O explicit costs. O implicit costs. Osunk costs. O opportunity costs.
Question 4 For a firm, the production function represents the relationship between OOO implicit costs and explicit costs. quantity of inputs and total cost. quantity of inputs and quantity of output. quantity of output and total cost. iz Instructions Question 5 Grace is a self-employed artist. She can make 20 pieces of pottery per week. She is considering hiring her sister Kate to work for her. Both she and Kate can make 35 pieces of pottery per week. What is Kate's marginal product? O 15 pieces of pottery O22.5 pieces of pottery O 35 pieces of pottery O 55 pieces of pottery
Could I have help finding the long run TC, AC, and MC?
Consider the following figure for short run production: Total Product Stage I Stage II Stage III В E Labor
Question 8 Which of the following is not a variable cost at the sandwich shop? O Cost of labor Cost of tomatoes O Cost of delivery Cost of rent Question 9
3. Production: a. State the decision rules used for finding the optimal amount of input(s) in both short-run and long-run production” b. Using your own words, explain the rationale behind each stated rule as if you were explaining them to someone who has not yet completed: c. The Demand for Labor is the visualization of what important short-run production concept, and what would shift this demand curve to the right? d. Use your answer above to explain why some worker (labor) earn much more than others, and why some workers are at a risk of losing their jobs to machines (capital). e. Explain why a Cobb-Douglas production function such as Q = LaKb s much more realistic than production functions such as Q = aL + bK
Question When do firms decide to shut down production in the short run? Explain it. How is the short run average cost curve and the long run average cost curve shaped? What is the difference between them? Graphical representation of the short-run total cost curve showing total cost, fixed cost, variable cost: and The marginal cost and average total cost:
MC Qu. 41 If the variable cost curve is a straight... If the variable cost curve is a straight line, then the marginal cost curve will be horizontal. marginal cost curve is upward sloping. Omarginal cost curve will be U-shaped. Omarginal cost curve may be U-shaped.
Consider the same firm from the Monday assignment but now let's call that cost schedule total variable cost. Q 1 2 3 4 5 6 7 8 9 TVC 12 20 24 28 34 42 52 64 78 And let's imagine that there is fixed costs of 18 which is sunk in the short run. a. Show this firm's average total cost, average variable cost and marginal cost on a graph. Indicate the efficient scale (I don't think the book uses the words "efficient scale" but it's the quantity where profit would be zero when P=MC. We will discuss what I mean by "efficient scale but probably not before Thursday. By "indicate" I mean give the quantity and MC. I don't need every point to be exactly to scale, I just care about the general shape of the curves, where things cross and the location and…
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