Indicate how each of the following would shift the (1) marginal- cost curve, (2) average-variable-cost curve, (3) average- fixed-cost curve, and (4) average-total-cost curve of a manufacturing firm. In each case, specify the direction of the shift. An increase in the hourly wage rates of production workers.

Q: Distinguish between Fixed Costs and Variable Costs and their implications for the shape of firms’…

A: Fixed Costs : These are the costs which do not change or depend on the level of production . For…

Q: Which firms have diseconomies of scale over the entire range of output?  a. Firm 1 b. Firm 2 c.…

A: In the long run, as the inputs are of variable nature, a firm’s expansion activities can either…

Q: Refer to the Long Run Average Total Cost curve below to answer the following questions:

A: Economies of scale occurs when LRAC decreases as output increases. In the given curve, LRAC…

Q: Which of the following statements is TRUE? O The average variable cost curve must always be…

A: The addition of fixed and Variable Cost gives us total costs, which when divided by the output give…

Q: Suppose a firm has only three possible plant-size options, represented by the ATC curves shown in…

A: Average total cost (ATC) is the equivalent of total fixed cost (TFC) and total variable costs (TVC)…

Q: Which of the following statements best represents a difference between short-run and long-run cost?…

A: In the production function, different inputs are used to produce the final output. Each input has…

Q: Question 13 Consider a firm whose cost function when both L and K are variable is shown in the…

A: Total cost: It refers to the total cost incurred while producing the commodity.Average Total cost…

Q: Draw a long-run average cost curve for a firm that exhibits economies of scale, constant returns to…

A: The total production process of a firm/company is an amalgamation of various costs, the optimum…

Q: The marginal cost curve: is a vertical line. generally rises at first and then declines as output…

A: Marginal cost is the cost of producing additional unit of output. The shape of marginal cost depends…

Q: Diminishing marginal product explains why, as a firm’s output increases.a. the production function…

A: Diminishing marginal product implies as more and more units of a given factor of production are…

Q: Copy the table below into your answer booklet and fill in the missing figures: output total cost…

A: Total cost (TC): - it is the sum of fixed and variable costs incurred in the production process.…

Q: y= f(x1,x2)=x1ax2b Derive the equation for an isoquant curve.   If a=b=0.5 , the price of factor 1…

A: y = x1ax2b x2b = y / (x1a) x2 = [y / (x1a)](1/b)

Q: What is difference between fixed and variable cost in short run? How does this result in the classic…

A: Total cost is defined as the total expenses that a company or firm has to incur in order to produce…

Q: In short-run production where labor is a variable input, the relationship between marginal product…

A: We are given, Economy is in short run. Labor is the variable input. Marginal cost of production =…

Q: Assume that the marginal cost of production is increasing. Can you determine whether the average…

A: AVC is the cost which is measured by dividing average cost by the quantity of output produced.  MC…

Q: Question 10 Consider a firm whose cost function when both L and K are variable is shown in the…

A: Total cost: It refers to the total cost incurred while producing the commodity.Marginal Cost: It…

Q: Average cost curves (except for average fixed cost) tends to be u-shaped , decreasing and then…

A: Marginal cost is nothing but the additional cost required to produce one extra unit while average…

Q: In the theory of the firm, economist consider the total cost to be a function of the output level Q:…

A: Answer - According to the mathematical defination of the funtion is that fucntion is a relation…

Q: Suppose that the Law of Diminishing Returns sets in immediately (that is, there is no range of…

A:

Q: Suppose that the marginal cost of producing a pound of cereal is $2, irrespective of the level of…

A: Marginal cost is in addition to total cost because of producing one more unit of output. Average…

Q: Which of the following statements are true according to the previous graph? Check all that apply.…

A: Total cost is the sum of all costs incurred in the production process. The total cost can be divided…

Q: The four statements below describe properties of a firm's short run cost curves. Complete the…

A: Average cost is the sum of average fixed cost an average variable cost. It is a U-shaped curve.

Q: Indicate how each of the following would shift the (1) marginal- cost curve, (2)…

A: Marginal cost: It represents an extra cost of producing an extra unit of output. In the beginning,…

Q: Suppose the production function is Q = 50 (KL)1/2. (Quantity = 50 times the square root of capital…

A: Q = 50 (KL)1/2 Q = 50 K1/2L1/2 In short run, some input factors are fixed and some are…

Q: ($/Unit) Marginal Cost Q1 Quantity (Units per time period) A) In the above diagram, marginal cost…

A: There is inverse relationship between marginal cost and marginal product due to applicability of law…

Q: Which of the following best describes economies of scale? O They refer to the increase in output…

A: In the short run atleast one input is fixed and in the long run all inputs are variable.

Q: curve II is the

A: In this figure there are three curves they are Total cost, Total fixed cost and Total variable cost.

Q: Compute the long-run costs in the following table. The price per unit of capital is $50 and per unit…

A: Given: Price per unit of capital=$50 Price per unit of labor=$30 The durable goods that are being…

Q: Which of the following statements is a reflection of the fact that the average fixed cost falls as…

A: Total cost (TC) is the sum of fixed cost (FC) and variable cost (VC). i.e., TC = FC + VC…

Q: (a)  Find the short-run cost function, SRTC(q) and marginal cost function, MC(q), assuming that k =…

A: (Q) Given the production function, q(k, L) = ?1/3?1/3 (a) Find the short-run cost function, SRTC(q)…

Q: Explain why the red curve is an incorrect representation of a long-run average cost curve. Note: the…

A: The average cost is the called the per unit cost of production. The AC = TC/Q. The long run Average…

Q: The following table describes the various least cost combinations of two inputs from various…

A: Iso quant shows the different possibil combinations of inputs that give same level of output . And…

Q: Which of the following statements are true according to the previous graph? Check all that apply. O…

A:

Q: Which of the following best describes the isoquants of the production function: q=0.5L+0.3K a.…

A: OPTION B - Linear and Downward Sloping q=0.5L+0.3K  Here, labor and capital are perfect substitutes.

Q: Explain the following statement by using a graphical analysis: “The long-run average cost curve is…

A: Average cost is the cost of producing one unit of goods and services . It is calculated by dividing…

Q: Suppose that the production of Y uses two inputs, L and K. L can be any positive real number, while…

A: Economics as a subject deals with the allocation of scarce resources among humans with unlimited…

Q: The shape of a firm’s long-run average cost curve depends on how costs vary with the scale of…

A: There are 2 types of cost will occur by any enterprises, 1. Fixed Cost. 2. Variable cost. Fixed will…

Q: Superconductor technology is becoming a widespread and indispensible component of the machines we…

A: The Long-run average cost curve is defined as a curve which portrays a firms lowest cost per unit at…

Q: Question 19 Which of the following statements best represents a difference between short-run and…

A: In economics, the concept of short-run and long-run is used to analyze the variability of various…

Q: The average variable cost curve and the average total cost curve get closer to each other as output…

A: The average variable cost refers to the variable cost per unit. The average total cost is the…

Q: Q1. In the theory of production, diminishing marginal returns to labour holds in the short run…

A: Since you asked multiple questions, we will solve the first question for you. If you want any…

Q: Indicate how each of the following would shift the (1) marginal- cost curve, (2)…

A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Isocost and Isoprofit Curve Analysis

An isocost curve in the production theory that is a crucial part of economics depicts different combinations of factor inputs at a given market cost. In other words, this shows all the combinations of production factors that cost the same for the firm to employ. Usually, this can be depicted as a downward sloping straight line when the firms act as the price-takers in the factor markets. The slope of this mainly depicts the relative prices of different production factors.