22. What does the Long Run Average Cost curve depict? a) It depicts the relationship between Average (Total) Cost and quantity produced when at least one input is fixed b) It depicts the relationship between Average (Total) Cost and the scale of operation in the long run c) Both a) and b) are true d) Neither a) nor b) is true 24. Assume that you start your own business producing clay pots and hire workers to start production. The first worker produces 20 clay pots a day, and when your hire the second worker, total production increases to 48 clay pots a day. What is the marginal product of labour for the second worker?

22. What does the Long Run Average Cost curve depict? a) It depicts the relationship between Average (Total) Cost and quantity produced when at least one input is fixed b) It depicts the relationship between Average (Total) Cost and the scale of operation in the long run c) Both a) and b) are true d) Neither a) nor b) is true 24. Assume that you start your own business producing clay pots and hire workers to start production. The first worker produces 20 clay pots a day, and when your hire the second worker, total production increases to 48 clay pots a day. What is the marginal product of labour for the second worker?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter7: Production, Costs, And Industry Structure

Section: Chapter Questions

Problem 33CTQ: Average cost curves (except for avenge fixed cost) tend to be U-shaped, decreasing and then...

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Average cost curves (except for avenge fixed cost) tend to be U-shaped, decreasing and then increasing. Marginal cost curves have the same shape, though this may be harder to see since most of the marginal cost curve is increasing. Why do you think that average and marginal cost curves have the same general shape?
How would an improvement in technology, like the high-efficiency gas turbines or Pirelli tire plant, affect me lung-nm average cost curve of a firm? Can you draw the old curve and the new one on the same axes? How might such an improvement affect other firms in the industry?
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