# Managerial Economics and Globalization

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ECO 550: Managerial Economics and Globalization Assignment 3 Instructor: Dr. A. A. Boakye Due By: 08/08/2011 Candidate’s Name-Andre Stevenson INSTRUCTIONS: Answer ALL the questions in PART I and PART II Part 1 (40 points) 1. The WXY Corporation has fixed costs of \$50. Its total variable costs (TVC) vary with output as shown in the following table. Refer to the table. The average total cost of 4 units of output is A. \$27.50 B. \$40.00 C. \$52.50 D. \$210.00 2. to scale as it increases its output over any reasonable range. If it increases all its inputs by 10%, its Suppose a particular firm exhibits constant returns A. total cost will increase by less than 10% B. average total cost will increase by…show more content…
If Driver #1 drives left (0,-1000) he will get the same results if Driver #2 drove left (0,-1000). It would be the same result for the right seat for both drivers as well. There is no room for any type of strategy and ultimately no matter which side of the road either drives on they will both equal the same numbers in the results. b. Is there Nash equilibrium in this game? Explain--- there is Nash equilibrium in the above example because no player will benefit from changing their strategy. No matter what information they receive they can no outsmart the other and create some type of advantage. c. Explain why this game is called a cooperative game? Although both Driver 1 and 2 will have a Nash equilibrium whether they choose right or left side of the road it’s still considered a cooperative game. The reason for this is because whether both drivers select left or right side there will still be equilibrium and no desire to change their strategy. Quest1ion 2: Use the table below to answer the following questions. [pic] a. What is the firm’s Total Revenue? In relation to the chart above Total Revenue will be inside the area of the box starting from O-E-J-A. Total Revenue in general is the price of a good or service multiplied by the quantity of the product. b. What is the Total Cost? Total cost is fixed cost and variable cost added up together. It’s the cost that it takes to