8. If average variablecost is $74 and total fixed cost is $100 at 5 units of output, thenaverage total cost at this output levelis: A. $91. B. $94.
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- A small company that shovels sidewalks and driveways has 100 homes signed up for its services this winter. It can use various combinations of capital and labor: intensive labor with hand shovels, less labor with snow blowers, and still less labor with a pickup truck that has a snowplow on front. To summarize, the method Choices are: Method 1: 50 units of labor, 10 units of capital Method 2: 20 units of labor, 40 units of capital Method 3: 10 units of labor, 70 units of capital If hiring labor for the winter costs $100/unit and a unit of capital costs 400, what is the best production method? What method should the company use if the cost of labor rises to $20/unit?What is the difference between economies of scale, constant returns to scale, and diseconomies of scale?In a short-run production process, a diminishing marginal product of labor explains why marginal cos is? 1.A negative and falling 2.zero 3.positive but falling D. positive and rising
- Capital (K) Labor (L) Total Product (TP) total fixed cost (TFC) total variable cost (TVC) total cost (TC) average fixed cost (AFC) average variable cost (AVC) average total cost (ATC) marginal cost (MC) 10 0 0 10 1 5 10 2 15 10 3 30 10 4 50 10 5 75 10 6 85 10 7 90 10 8 92 10 9 92 10 10 90 1.1 From the information in the table, calculate total fixed cost (TFC), total variable cost (TVC), total cost (TC), average fixed cost (AFC), average variable cost (AVC), average total cost (ATC) and marginal cost (MC). 1.2 At what point is average total cost minimized and at what post…Average fixed cost, average total cost a -Why does average fixed cost continuously fall as output increases? b. And why does total average cost first fall at initial level of production as produc increases, and then it increases as production increases.Accounting Complete the table and Graph the cost curves: Output (Q)/day Total Variable costs ($) Total costs (TC) ($) Marginal costs (MC) ($) Average Total costs (ATC) ($) Average Variable costs (AVC) ($) 0 0 635 -- ---- ---- 1 50 2 100 3 150 4 200 5 300 6 400 7 500 8 650 9 800 What is the dollar value of the fixed costs in this example? Why do marginal costs, average variable costs, average total cost have a “U” shape? That is, why do they start out high, get lower, and then higher again? For 7 units of output, what is the average fixed cost? Why does average fixed cost fall as a firm produces more of a good?
- Production costs of books are presented in the table below. Labor Quantity Fixed Cost Variable Cost Total Cost MarginalCost AverageTotal Cost 0 0 $80 $0 $80 1 10 $80 $30 $110 2 26 $80 $60 $140 3 46 $80 $90 $170 4 65 $80 $120 $200 5 78 $80 $150 $230 Using the table above, calculate the average total cost for producing 10 books, in dollars.a. Define economies of scale and explain why they might arise. Definediseconomies of scale and explain why they might arise. b. Explain the relationship between total product, marginal product, and averageproduct.c. How does fixed cost affect marginal cost? Why is this relationship important?t is said that total variable cost curves are moved by only two factors. What are those factors? (hint: think Jevons) Show graphically and explain how each change impacts variable costs.
- 2b statements is true or false and explain If marginal cost is larger than average cost, average cost will fall as output increases.a) True or False? Short-run average total cost curves have an "U the law of diminishing marginal returns. Ushape because of b) True or False? Long-run average total cost curves have an "U" shape for the same reason that short-run average total cost curves have an "U" shape.Cost curves. a) Why does the difference between AVC and ATC get smaller as Q increases? b) Why does MC intersect AVC and ATC at their minimum points? c) Explain the difference between the short run and the long run. d) What is meant by “economies of scale”? (Hint: it has to do with long run average cost) e) Give an example of economies of scale and explain.
