Principles Of Economics 2e
2nd Edition
ISBN: 9781680920864
Author: Timothy Taylor, Steven A. Greenlaw, David Shapiro
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Textbook Question
Chapter 7, Problem 41P
Compute the
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Isoquant curves
The Firm can trade two doctors for five gardeners and output remains constant
What is the shape is the isoquant curve for the firm? (doctors on x axis)
Find slope of curve at:
(20,15)
(5,25)
(5,15)
Cost curves
Egidio Binaccio designed an ancestry app that allows people to connect with long lost Italian relatives.
Egidio notices the following relationship between the number of hours he schedules and the number of
downloads (sales) he gets. Below is a production function, for Egidios current company set up.
NUMBER of LABOUR
DOWNLOADS
HOURS
B)
10
C)
20
30
40
50
60
70
80
90
100
110
120
130
140
6.50
11.00
14.50
17.50
20.50
23.75
27.50
32.00
37.50
44.50
53.50
65.00
79.50
97.50
TVC
TC
MC
AVC
Suppose the firm can hire all the labour it would ever want at the going wage of $8 per labour-hour. The
firm's total fixed costs are $64 per day.
A)
ATC
Fill in the table showing total variable cost (TVC), total cost (TC), average variable cost (AVC),
average total cost (ATC), and marginal cost (MC). [Remember: Marginal cost should be entered
midway between rows of output.]
On a graph with DOWNLOADS (per day) on the horizontal axis, draw the three "per-unit" cost
curves, AVC, ATC, and MC. [Note…
Total Cost Analysis
The manager of a rival T-shirt stand found that her cost to produce 10 T-shirts is $105.98. while the cost to produce 40 T-shirts is $398.42.
Assume the cost Cod is a linear function of x, the number of T-shirts produced.
Find the total cost of producing 100 T-shirts (Round to 2 decimal places)
Chapter 7 Solutions
Principles Of Economics 2e
Ch. 7 - A firm had sales revenue of 1 million last year....Ch. 7 - Continuing from Exercise 7.1, the films factory...Ch. 7 - The WipeOut Ski Company manufactures skis for...Ch. 7 - Based on your answers to the WipeOut Ski Company...Ch. 7 - If two painters can paint 200 square feet of wall...Ch. 7 - Return to the problem explained in Table 7.13 and...Ch. 7 - Suppose the cost of machines increases to 55,...Ch. 7 - Automobile manufacturing is an industry subject to...Ch. 7 - What are explicit and implicit costs?Ch. 7 - Would you consider an interest payment on a loan...
Ch. 7 - What is die difference between accounting and...Ch. 7 - What is a production function?Ch. 7 - What is the difference between a fixed input and a...Ch. 7 - How do we calculate marginal product?Ch. 7 - What shapes would you generally expect a total...Ch. 7 - What are the factor payments for land, labor, and...Ch. 7 - What is the difference between fixed costs and...Ch. 7 - How do we calculate each of the following:...Ch. 7 - What shapes would you generally expect each of the...Ch. 7 - Are there fixed costs in the lung-run? Explain...Ch. 7 - Are fixed costs also sunk costs? Explain.Ch. 7 - What are diminishing marginal returns as they...Ch. 7 - Which costs are measured on per-unit basis: fixed...Ch. 7 - What is a production technology?Ch. 7 - In choosing a production technology, how will...Ch. 7 - What is a long-run average cost curve?Ch. 7 - What is the difference between economies of scale,...Ch. 7 - What shape of a long-run average cost curve...Ch. 7 - Why will firms in most markets be located at or...Ch. 7 - Small Mom and Pop firms, like inner city grocery...Ch. 7 - A common name for fixed cost is overhead. If you...Ch. 7 - How does fixed cost affect marginal cost? Why is...Ch. 7 - Average cost curves (except for avenge fixed cost)...Ch. 7 - What is the relationship between marginal product...Ch. 7 - It is clear that businesses operate in the short...Ch. 7 - Retune to Table 7.2. In the top half of the table,...Ch. 7 - How would an improvement in technology, like the...Ch. 7 - Do you think that the taxicab industry in large...Ch. 7 - A firm is considering an investment that will earn...Ch. 7 - Return to Figure 7.7. What is the marginal gain in...Ch. 7 - Compute the average total cost, average variable...Ch. 7 - A small company that shovels sidewalks and...
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Similar questions
- handwrite it out and include graph pleasearrow_forwardUse the accompanying graph to answer the following questions. Assume the company makes 30,000 parts per month of Product A and 17,500 parts per month of Product B. Click the icon to view the provided graph. (a) Which Product has the higher variable cost, and what is this value in units of dollars per part? has the higher variable cost. This value is $/part. (Type an integer or a decimal. Round your answer to two decimal places.) More Info Total Cost or Revenue [$] Milions $6- $5- $4- $3- FA $0- O. 0 10 - Product A Total Cost - Product B Total Cost Product A Revenue Product B Revenue G1 A 20 30 G T 40 Time (t) [months] Print 50 Done 60 N ... 70 80 Ⓡ o Xarrow_forwardDefine economies of scalearrow_forward
- A firm has the production function f(X, Y) = x²/2 y1/2, where X is the amount of factor x used and Y is the amount of factor y used. On a diagram we put X on the horizontal axis and Y on the vertical axis. We draw some isoquants. Now we draw a straight line on the graph and we notice that wherever this line meets an isoquant, the isoquant has a slope of -3. The straight line we drew Select one: O a. is vertical. b. is horizontal. c. is a ray through the origin with slope 3. d. is a ray through the origin with slope 4. O e. has a negative slope.arrow_forwardExplain two reasons due to which economies of scale may arise. Write your answer within 40 words. You are not required to draw any diagramsarrow_forwardIsoquant curves Gym requires exactly 3 bottles of water per athlete to maximise performance (athletes on horizontal) What is the shape is the isoquant curve? Find slope of cuve at: (20,15) (5,25) (5,15)arrow_forward
- Explain the Law of Returns to Scale with the help of an example.arrow_forwardWhat is total fixed cost when output is 2, fixed cost is 25, and average cost is 30arrow_forwardDiminishing returns A cost function of the form C(x) = 1/2 x2reflects diminishing returns to scale. Find and graph the cost,average cost, and marginal cost functions. Interpret the graphs andexplain the idea of diminishing returns.arrow_forward
- explain short run and long run cost of production analysis with graphsarrow_forwardUse the information in the graph to the right to find the values for the following at an output level of 65 The marginal cost is $55 (Enter a numeric response using an integer.) The total cost is $2925 The variable cost is $2405 The fixed cost is $520 XX Cost 100- 55 45. 37 0 65 Quantity of output MC ATC AVCarrow_forwardusing an isoquant/isocost diagram explain the difference between diminishing returns to a variable factor and decreasing returns to a scalearrow_forward
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