1. The total cost of producing a quantity q is C(q). The average cost a(q) is given in figurebelow. The following rule is used by economists to determine the marginal cost C'(q0), forany qo:Construct the tangent line ti to a(q) at qo.Let t, be the line with the same vertical intercept as t, but with twice the slope of t, .Then C'(q0), is the vertical distance shown in figure below. Explain why this rule works.$/unita(q)t2t1C'(qo)

C’ (q 0) is the marginal cost for any q 0. The line t 2 has slope twice than that of line t 1.

Answered: 1. The total cost of producing a…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Let the production function be given by q=2(square root of L)(square root of K)} and Price of K be 5 and the Price of L be 2. Then, the slope of the isocost line is: Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer. a: -.4 b: -2.5 c: -5/2 d: 2/5 e: none of the above
A manufacturer's production is modelled by the function f(x, y ) = 100x 34 y 14 where x у represents the units of labour and y represents the units of capital. Each labour unit costs $ 200 and each capital unit costs $ 250. The total expenses for labour and capital must be $ 50, 000. Find the maximum production level.
A company produces commercials. A 2-minute commercial, for example, needs exactly 5 minutes of filming and 8 minutes of editing. Let x1 denote the minutes of filming and x2 denote the minutes of editing. a) Write down the production function and state whether it has increasing, constant, or decreasing returns to scale b) Suppose that filming costs $45 per minute and editing costs $10 per minute. To produce a 5-minute commercial, how many minutes of filming and how many minutes of editing is needed to minimize cost? c) Suppose that filming costs w1 per minute and editing costs w2 per minute. Let y denote the length (in minutes) of commericals produced. derive the conditional factor demand functions x1(w1,w2,y) and x2(w1,w2,y) and its cost function c(w1,w2,y)
Let's say jacky has a demand function for a product made in Ney york city given that the function D(q)=-1.15q+270, where q is the number of items in demand and D(q) is the price per item, in dollars, that can be charged when q units are sold. Say that the fixed costs of production for the item is $5,000 and variable costs are $10 per item produced. If 100 items are produced and sold, what are the finds :
4. Various measures of cost Douglas Fur is a small manufacturer of fake-fur boots in San Francisco. The following table shows the company's total cost of production at various production quantities. Fill in the remaining cells of the following table. Average Variable Cost (Dollars per pair) Average Total Cost (Dollars per pair) Quantity Total Cost Marginal Cost Fixed Cost Variable Cost (Pairs) (Dollars) (Dollars) (Dollars) (Dollars) 120 1 210 2 270 3 315 4 380 5 475 630
Consider an airline's decision about whether to cancel a particular flight that hasn't sold out. The following table provides data on the total cost of operating a 100-seat plane for various numbers of passengers. Total Cost Number of Passengers (Dollars per flight) 40,000 10 60,000 20 65,000 30 68,000 40 70,000 50 71,000 60 72,500 70 73,500 80 74,000 90 74,300 100 74,500 Given the information presented in the previous table, the fixed cost to operate this flight is s At each ticket price, a different number of consumers will be willing to purchase tickets for this flight. Assume that the price of a flight is fixed for the duration of ticket sales. Use the previous table as well as the following demand schedule to complete the questions that follow. Price Quantity Demanded (Dollars per ticket) (Tickets per flight) 1,000 700 30 400 90 200 100
Suppose the imaginary company of Panthera is a small, Raleigh-based American apparel manufacturer specializing in athleisure. The following table presents the brand's total cost of production at several different quantities. Fill in the remaining cells of the following table. Quantity Total Cost (Pairs) (Dollars) Marginal Cost (Dollars) Fixed Cost Variable Cost (Dollars) (Dollars) Average Variable Cost (Dollars per pair) Average Total Cost (Dollars per pair) 0 120 1 210 2 270 3 315 4 380 475 6 630
Suppose that widgets can be produced using two different production techniques, A and B. The following table provides the total input requirements for each of five different total output levels. Q = 1 Tech. K L A B Q=2 K L 2 4 1 6 1 3 2 5 Total Cost L K Assuming that the price of labor (P₁) is $1 and the price of capital (PK) is $3, calculate the total cost of production for each of the five levels of output using the optimal (least-cost) technology at each level. Q=3 K L 4 9 4 8 To do this, complete the table below by calculating the total cost of production, filling in the missing values using the optimal (least-cost) technology at each level. (Enter your responses as whole numbers.) Q=4 K L 12 5 Total Cost How many labor hours (units of labor) would be employed at each level of output? How many machine hours (units of capital)? To answer this, complete the table below for the units of labor and units of capital that would be used to produce each level of output. (Enter your…
Suppose that the Travnikar Corporation manufactures widgets. Analysts that work for the company have found a function C(x) which reports the cost to produce x widgets and a function R(x) which reports the total revenue from selling x widgets. Currently, the company is producing 500 widgets, but the analysts find that R'(500)=85 and C'(500)=79. In order to maximize profits, should the analysts recommend increasing or decreasing production?
Please show step by step
Am. 111.
Consider the following marginal cost function MC= 5 + 2qi. (a) Does the production process exhibits increasing returns? decreasing returns? constant returns? (b) If the price is $23. What’s the optimal production level? (c) If the price is $31. What’s the optimal production level?

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