Table 1 below shows the production of wooden table by Aurora Enterprise. As the managerd the company, you need to analyze the effectiveness of production and the relationshipbetween fixed and variable input in order to maximize the production. From the data given,you can determine the effective stage of production that can provide high maximum profits.From the data provided, answer the following question. Please provide any figure or diagramin order to explain related theory.Table 1Land LabourlOutputTotalAverage MarginalTotalTotal CostProductProductProduct(TC)Variable(TP)(AP)(MP)Cost(TVC)133350273.5048030331113261910555452127776613.21415210217612.61018213278011.434219169880108.677.226621678-23282781072-6413363b. Based on table 1, calculate the amount of Average Fixed Cost (AFC),

Average Fixed cost (known as rectangular hyperbola curve) is a downward falling curve from left to…

Table 1 Labour/ Total Cost (TC) Land Average Total Variable Cost (TVC) Total Marginal Output Product Product Product (TP) (AP) (MP) 1 3 3.50 3 3 50 2 7 4 80 30 33 11 13 26 19 105 55 4 52 66 127 77 5 13.2 14 152 102 76 12.6 10 182 132 7 80 11.43 4 219 169 8 80 10 266 216 78 328 8.67 7.2 278 10 72 -6 413 363 b. Based on table 1, calculate the amount of Average Fixed Cost (AFC),

Table 1 Labour/ Total Cost (TC) Land Average Total Variable Cost (TVC) Total Marginal Output Product Product Product (TP) (AP) (MP) 1 3 3.50 3 3 50 2 7 4 80 30 33 11 13 26 19 105 55 4 52 66 127 77 5 13.2 14 152 102 76 12.6 10 182 132 7 80 11.43 4 219 169 8 80 10 266 216 78 328 8.67 7.2 278 10 72 -6 413 363 b. Based on table 1, calculate the amount of Average Fixed Cost (AFC),

Microeconomics A Contemporary Intro

10th Edition

ISBN:9781285635101

Author:MCEACHERN

Publisher:MCEACHERN

Chapter7: Production And Cost In The Firm

Section7.A: Appendix: A Closer Look At Production And Cost

Problem 1AQ

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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?
In choosing a production technology, how will firms react if one input becomes relatively more expensive?
What is the difference between a fixed input and a variable input?
Answer the following questions on the basis of this information for a single fifirm: total cost of capital = $1000; price paid for labor = $12 per labor unit; price paid for raw materials = $4 per raw-material unit. a. Suppose the firm can produce 5000 units of output by combining its fixed capital with 100 units of labor and 450 units of raw materials. What are the total cost and average total cost of producing the 5000 units of output?b. Now assume the firm improves its production process so that it can produce 6000 units of output by combining its fixed capital with 100 units of labor and 450 units of raw materials. What are the total cost and average cost of producing the 6000 units of output?c. Refer to your answers to 8a and 8b and explain how process innovation can improve economic efficiency.
Please no written by hand solution 3) Read the Chicago Tribune article titled “At Amazon’s Monee Warehouse, Robot Co-Workers are the New Normal”. Over the long run, it appears that Amazon is working towards min- imizing its operating costs by reallocating its factors of production away from labor and towards robots (i.e., capital). Using the cost minimization model discussed in class, explain how rising relative wages likely incentive Amazon to invest in robots. 4) All else equal, which is steeper, the demand curve for a normal good or the demand curve for an inferior good? Explain.4 5) Assume that the price elasticity of demand (PED) for a firm’s out is PED = −0.75 and that the price of its output is currently at p = $10. (a) How would this firm’s revenues change if it increased its quantity produced by a little bit? Explain. (b) Instead of increasing its quantity produced, how would this firm’s revenues change if it increased its price a bit? Explain.
Suppose there are two inputs for production, labor and capital. The firm’s production process isdefined by the following production functiony=f(L,K).Howdoweinterpretthefirm’smarginalrateof technical substitution? a)How many units of capital the firm would have to give up in order to attain one more unit oflabor, such that the firm maintains the same cost level b)How many units of capital the firm would have to give up in order to attain one more unit oflabor, such that the firm produces one more unit of output c)How many units of capital the firm would have to give up in order to attain one more unit oflabor, such that the firm maintains the same level of production d)a) and b) are correct e)a) and c) are correct
Complete the table directly below by calculating MP and AP. Inputs ofL TP MP AP 0 01 152 343 514 655 746 807 838 82 Plot the TP, MP and AP and explain in detail the relationship between eachpair of curves. Explain why PM first rises, then declines, and ultimatelybecomes negative.
Only typed answer and please don't use chatgpt Question: In Figure 1, if labor is the variable input and all other inputs are fixed, then at Q4 units of output Group of answer choices: a) total cost is at a minimum. b) marginal product is at a maximum.average variable cost is at a minimum. c) average variable cost is at a minimum. d) the marginal product of labor is less than the average product of labor, (MPL < APL). e) the marginal product of labor is greater than the average product of labor, (MPL > APL).
1.Suppose a chair manufacturer is producing in the short run (with its existing plant andequipment). The manufacturer has observed the following levels of production correspondingto different numbers of workers:Number of Workers Number ofChairs 1 10 2 18 3 24 4 28 5 30 6 28 7 25a. Calculate the marginal and average product of labor for this production function.b. Does this production function exhibit diminishing returns to labor? Explain.c. Explain intuitively what might cause the marginal product of labor to becomenegative.
Please solve Figure 1 below. Figure 1 (a) What assumption does Figure 1 make about the nature of the production function of a firm and what does point A represent? Explain your answer. (b) Reproduce Figure 1 provided in the question. By making appropriate inferences from it, work further to show a new isocost line for the cost level of $1000 on the same figure, if wages fall by 10% while the rental rate on capital increases by 20%. Explain your work carefully. (c) What input combination will the firm use to produce output level of 100, if wages fall by 10% while the rental rate on capital increases by 20%? Explain your answer.
The manager's job in leading the previously mentioned production process is twofold: (1) toguarantee that the company works on the production function, and (2) to ensure that thebussiness employs the appropriate level of inputs. Justify how these two factors contribute tothe company operating at he optimal position the production function.
15. A firm can use three different production technologies, withcapital and labor requirements at each level of output as follows:TECHNOLOGY 1 TECHNOLOGY 2 TECHNOLOGY 3DailyOutputK L K L K L100 3 7 4 5 5 4150 3 10 4 7 5 5200 4 11 5 8 6 6250 5 13 6 10 7 8a. Suppose the firm is operating in a high-wage country, wherecapital cost is $100 per unit per day and labor cost is $80 perworker per day. For each level of output, which technologyis cheapest?b. Now suppose the firm is operating in a low-wage country,where capital cost is $100 per unit per day but labor cost isonly $40 per unit per day. For each level of output, whichtechnology is cheapest?c. Suppose the firm moves from a high-wage to a low-wagecountry but its level of output remains constant at 200 units