1. Nimbus, Inc., makes brooms and then sells them door-to-door. Here is the relationship between the number of workers and Nimbus's output during a given day: Workers 0 c) d) 1 2 3 4 5 6 7 Output (Brooms) 0 20 50 90 120 140 150 155 Marginal Product (Brooms) Total Cost ($) Average Total Cost ($) Marginal Cost ($) a) Fill in the column of marginal products. What pattern do you see? How might you explain it? b) A worker costs $100 a day, and the firm has fixed costs of $200. Use this information to fill in the column for total cost. Fill in the column for average total cost. What pattern do you see? Now fill in the column for marginal cost. What pattern do you see? e) Compare the column for marginal product with the column for marginal cost. Explain the relationship. f) Compare the column for average total cost with the column for marginal cost. Explain the relationship. What is Nimbus's efficient scale?

1. Nimbus, Inc., makes brooms and then sells them door-to-door. Here is the relationship between the number of workers and Nimbus's output during a given day: Workers 0 c) d) 1 2 3 4 5 6 7 Output (Brooms) 0 20 50 90 120 140 150 155 Marginal Product (Brooms) Total Cost ($) Average Total Cost ($) Marginal Cost ($) a) Fill in the column of marginal products. What pattern do you see? How might you explain it? b) A worker costs $100 a day, and the firm has fixed costs of $200. Use this information to fill in the column for total cost. Fill in the column for average total cost. What pattern do you see? Now fill in the column for marginal cost. What pattern do you see? e) Compare the column for marginal product with the column for marginal cost. Explain the relationship. f) Compare the column for average total cost with the column for marginal cost. Explain the relationship. What is Nimbus's efficient scale?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

1. Nimbus, Inc., makes brooms and then sells them door-to-door. Here is the
relationship between the number of workers and Nimbus's output during a given
day:
Workers
0
1
2
3
4
5
6
7
Output
(Brooms)
0
20
50
90
120
140
150
155
Marginal
Product
(Brooms)
Total Cost
($)
Average
Total Cost
($)
Marginal
Cost ($)
a)
Fill in the column of marginal products. What pattern do you see? How might
you explain it?
b)
A worker costs $100 a day, and the firm has fixed costs of $200. Use this
information to fill in the column for total cost.
c) Fill in the column for average total cost. What pattern do you see?
Now fill in the column for marginal cost. What pattern do you see?
d)
e)
Compare the column for marginal product with the column for marginal cost.
Explain the relationship.
f)
Compare the column for average total cost with the column for marginal cost.
Explain the relationship.
g)
What is Nimbus's efficient scale?

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workers ouput marginal product total cost average total cost marginal cost 0 0 0 200 0 $0 1 20 20 300 $15 $5 2 50 30 400 $8 $3.33 3 90 40 500 $5.56 $2.50 4 120 30 600 $5 $3.33 5 140 20 700 $5 $5 6 150 10 800 $5.33 $10 7 155 5 900 $5.8 $20 a.) can you explain dimisnishing marginal product based on those numbers? b.) compare the column for average total coat and the column for marginal cost. Explain the relationship.
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