EBK FOUNDATIONS OF ECONOMICS
8th Edition
ISBN: 8220103632225
Author: PARKIN
Publisher: PEARSON
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Chapter 14, Problem 7IAPA
To determine
To explain:
The way facts of the news clip affect the short-run, long-run average cost and marginal cost of producing electricity.
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Serena and John run a business that sets up and tests computers. Assume that Serena and John can switch
between setting up and testing computers at a constant rate. The following table applies.
Serena
John
Minutes Needed to
Set Up 1
Computer
48
30
Test 1
Computer
?
40
Number of Computers Set Up or Test
in a 40-Hour Week
Computers Set Up Computers Tested
50
80
(25 computers set up, 40 computers tested)
(0 computers set up, 80 computers tested)
(8 computers set up, 32 computers tested)
(50 computers set up, 0 computers tested)
80
60
Refer to Table 3-7. Which of the following points would not be on Serena's production possibilities frontier,
based on a 40-hour week?
Sean is a hard-working college freshman. One Thursday, he decides to work nonstop until he has answered 88 practice problems for his physics course. He starts work at 8:00 AM and uses a table to keep track of his progress throughout the day. He notices that as he gets tired, it takes him longer to solve each problem.
Time
Total Problems Answered
8:00 AM
0
9:00 AM
40
10:00 AM
64
11:00 AM
80
Noon
88
Use the table to answer the following questions.
The marginal, or additional, gain from Sean’s second hour of work, from 9:00 AM to 10:00 AM, is
problems.
The marginal gain from Sean’s fourth hour of work, from 11:00 AM to noon, is
problems.
Later, the teaching assistant for Sean’s physics course gives him some advice. “Based on past experience,” the teaching assistant says, “working on 12 problems raises a student’s exam score by about the same amount as reading the textbook for 1 hour.” For simplicity, assume students always cover the same number of…
When examining the costs faced by a business, explain how economists distinguish between the short run and the long run. Why is it that Diminishing Marginal Product applies in the short run but not the long run?
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