Microeconomics: Private and Public Choice (MindTap Course List)
15th Edition
ISBN: 9781285453569
Author: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher: Cengage Learning
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Chapter 11, Problem 4CQ
To determine
Distinguish between the
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Consider a firm facing conventional production technology. The short run Production
Function has a small range of increasing marginal product (increasing marginal returns) and
then is subject to the Law of Diminishing Marginal Product (diminishing marginal returns).
A. Putting quantity on the horizontal axis and dollars on the vertical axis, depict three
important curves: Fixed Cost (FC), Variable Cost (VC), and Total Cost (TC). (Note that we
are not asking you to depict average cost functions!)
B. Please clearly indicate on this graph the range of quantities where the firm is experiencing
(1) increasing marginal product and (2) diminishing marginal product.
C. In a few sentences, please justify why you've made this specific classification of
increasing/diminishing marginal product in part (b).
please answer the following questions:
What is money, and why does anyone want it?
Explain the concept of the opportunity cost of holding money .
Explain why an increase in U.S. interest rates relative to UK interest rates would affect the U.S.-UK exchange rate.
Suppose that a person’s wealth is $50,000 and that her yearlyincome is $60,000. Also suppose that her money demand functionis given by Md = $Y10.35 - i2Derive the demand for bonds. Suppose the interest rate increases by 10 percentage points. What is the effect on her demand for bonds?b. What are the effects of an increase in income on her demand for money and her demand for bonds? Explain in words
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Question 6 of 18
>
The graph shows the average total cost (ATC) curve, the
marginal cost (MC) curve, the average variable cost (AVC)
curve, and the marginal revenue (MR) curve (which is also
the market price) for a perfectly competitive firm that
produces terrible towels. Answer the three questions,
assuming that the firm is profit-maximizing and does not shut
down in the short run.
What is the firm's total revenue?
S
What is the firm's total cost?
$
What is the firm's profit? (Enter a negative number for a loss.)
$
Price
$320
$300
$200
$150
205 260
336
365
Quantity
MC
ATC
AVC
MR=P
Chapter 11 Solutions
Microeconomics: Private and Public Choice (MindTap Course List)
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