- Refer to the information provided in Figure below to answer the question(s) that follow. Units of capital 80 60 A 0 B_D 60 80 120 Units of labor 1) Refer to Figure If the price of capital is $20, then along isocost line AB total cost is 2) Refer to Figure The firm is currently along isocost CD. If the price of capital is $10, then the price of labor is

- Refer to the information provided in Figure below to answer the question(s) that follow. Units of capital 80 60 A 0 B_D 60 80 120 Units of labor 1) Refer to Figure If the price of capital is $20, then along isocost line AB total cost is 2) Refer to Figure The firm is currently along isocost CD. If the price of capital is $10, then the price of labor is

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Production Total Product Total Fixed Cost Total variable cost Total Cost Average fixed cost Average variable cost Average Total Cost Marginal Cost 0 0 1 25 2 45 3 60 4 70 5 85 6 105 7 135 8 180 9 240 10 315 Assume that fixed costs are $50, labor is the only variable input and its costs are reflected completely in the costs above. Complete the table Graph AFC, AVC, ATC, and MC Explain how increasing returns and decreasing returns are depicted in your graph If the labor input increased by $10 at every unit of production, what would be the effect on your graphs?
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Consider the production function of the firm below. Which of the following is NOT true? The marginal product of labor at B is 70 units. The total product is increasing as inputs to production increase. The marginal product of capital at point D is 50. The marginal products of both labor and capital are always increasing.
Explain why this statement is true or false: "If the labor cost per table is $20 and the material cost per table is $30, the short run average cost per table is $50."
GM cuts jobs at its Australian manufacturing unit GM will cut 500 jobs, or about 12% of its workforce, at its Australian plant because of a sharp fall in demand for its locally-made "Cruze" small car. Source: The Wall Street Journal, April 8, 2013 As GM cuts its workforce, how will the marginal product and average product of a worker change in the short run? Suppose that before the cuts the marginal product of GM workers is below their average product. As the number of workers decreases, the marginal product of a GM worker and the average product of a GM worker in the short run. increases; decreases does not change; does not change decreases; decreases increases; increases decreases; increases
Consider the following diagram showing a range of isoquants and isocosts, with labour measured on the horizontal axis and capital measured on the vertical axis. Assume that when the firm is producing in the short run, capital is fixed at K but capital is variable in the long run. K, Capital K A B Q3 Isoquant Q2 Isoquant Q₁ Isoquant L, Labour Which of the following can we conclude? O Only point B represents cost minimisation in both the short run and the long run, as it is on the short run expansion path, as well being the cost minimising point in the long run. Points A, B and C represent cost minimisation in the long run only. There are no points that represent cost minimisation in both the short run and the long run. Points A, B and C represent cost minimisation in both the short run and the long run. Points D and E represent cost minimisation in the short run only. Points A, B and C represent cost minimisation but only in the short run. Points D and E represent cost minimisation in…