Economics Exam Practice

3498 WordsJan 2, 201114 Pages
1. (TCO A) Suppose you are hired to manage a small manufacturing facility that produces Widgets. (a.) You know from data collected on the Widget Market that market demand has recently decreased and market supply has recently increased. As manager of the facility, what decisions should you make regarding production levels and pricing for your Widget facility? Remember that supply and demand are about the market supply and market demand, which is bigger than your own company. You are being given data on supply and demand for the whole market, and are being asked what effect that has on you as a small part of that market. (b.) Now, suppose that following the supply and demand changes in (a), a substitute good goes down in price,…show more content…
Show all work. (Be careful here!) (TCO C) You have been hired to manage a small manufacturing facility which has cost and production data given in the table below. Total Total Workers Labor Cost Output Revenue 1 $500 100 $700 2 1000 280 1150 3 1500 440 1440 4 2000 540 1570 5 2500 600 1670 6 3000 630 1710 7 3500 640 1730 (a.) What is the marginal product of the second worker? (b.) What is the marginal revenue product of the fourth worker? (c.) What is the marginal cost of the first worker? (d.) Based on your knowledge of marginal analysis, how many workers should you hire? Explain you answer. 3. (TCO C) You have been hired to manage a small manufacturing facility which has cost and production data given in the table below. Total Total Workers Labor Cost Output Revenue 1 $500 100 $700 2 1000 280 1150 3 1500 440 1440 4
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