MICROECONOMICS CONNECT STUDY GUIDE
21st Edition
ISBN: 9781260297287
Author: McConnell
Publisher: MCG
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Chapter 19, Problem 3RQ
To determine
Whether should the firm produce coal or not.
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The following figure shows the revenue and cost curves for a firm X.
RM
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7
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5
4
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MC
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AC
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Units
If a firm X achieves productivity efficiency, what will be the total revenuel
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At what price will a firm stop operating? Please explain.
If the market price is RM4.00, what is the total profit or total loss.
Consider a small landscaping company run by Mr. Viemeister. He is considering increasing his firm’s capacity. If he adds one more worker, the firm’s total monthly revenue will increase from $50,000 to $58,000. If he adds one more tractor, monthly revenue will increase from $50,000 to $62,000. Each additional worker costs $4,000 per month, while an additional tractor would also cost $4,000 per month. LO16.5 a. What is the marginal product of labor? The marginal product of capital? b. What is the ratio of the marginal product of labor to the price of labor (MPL/PL)? What is the ratio of the marginal product of capital to the price of capital (MPK/PK)? c. Is the firm using the least-costly combination of inputs? d. Does adding an additional worker or adding an additional tractor yield a larger increase in total revenue for each dollar spent?
acroeconómic Policy and Natural Resources (10)|| Sp
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When a par ar firm is fully utilizing its capital, its output is given by Y = 10 × LO5. The cost of labour is OMR1 per
unit. To maximize profit, how many units of labour should this firm use?
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O a. 50
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O b. 100
О с. 5
O d. 25
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- Suppose that marginal product doubled while product price tripled in the table belo Marginal Marginal Product (MP) Units of Total Product Product Price | Total Revenue Revenue Resource (Output) Product $2 $0 1 7 7 2 14 $14 2 13 6. 2 26 12 3 18 2 36 10 4 22 2 44 8 25 50 6 27 2 2 54 4 7 28 1 56 LOarrow_forwardAssume that the following marginal costs exist in catfish production: Quantity produced (units per day) 10 11 12 13 14 15 16 17 Marginal cost (per unit) $4 6 8 10 12 14 16 18 Price (per unit) $25 24 23 22 21 20 19 18 Quantity demanded (units per day) 10 11 12 13 14 15 16 17 Total revenue $Answer $Answer $Answer $Answer $Answer $Answer $Answer $Answer Marginal revenue $Answer $Answer $Answer $Answer $Answer $Answer $Answer (a) Complete the table above. If you are entering any negative numbers be sure to include a negative sign (-) in front of those numbers. (b) At what rate of output is MR = MC? Answer units (c) What price will a monopolist charge for that much output? $Answer (d) If the market were perfectly competitive, what price would prevail? $Answer (e) How much output would be produced?arrow_forwardq 0 1 2 3 4 5 6 TFC $5 5 5 5 5 5 5 TVC $0 3 LO 5 9 16 25 36 MC - $3 2 4 7 9 11 P = MR $5 5 5 5 LO 5 5 5 A profit-maximizing firm should produce a quantity of TR $0 5 10 15 20 25 30 TC $5 8 10 14 21 30 41 Profit $-5 - 3 0 1 - 5 11 units. (Enter your response as a whole number.)arrow_forward
- 7. Suppose a firm has only three possible plant-size options, represented by the ATC curves shown in the figure. What plant size will the firm choose in producing (a) 50, (b) 130, (c) 160, and (d) 250 units of output? Draw the firm's long-run average-cost curve on the diagram and describe this curve. LO9.4 ATC 0 M 150 ATC2 ATC₁ ATC3 80 240arrow_forwardMC ATC AVC MARKET PRICE AFC 15 P.arrow_forwardMarket demand is Qd = 100 - p. Market supply is Qs = 4p. A competitive firm has MC = 2Q. How %3! many units of output will the firm produce? O 10 O 20 33.3 O 15arrow_forward
- Consider the case of a manufacturing company which produces and sells brand pens. The selling price is $20 per pen, the total fixed operating cost is $2 million, and the variable cost per unit is $10, the total fixed financing cost is $500,000. How many pens should the company sells so it would neither make a profit or loss? O a. 4,000,000 O b. 20,000,000 O c. 200,000 O d. 25,000 O e. 2,500,000arrow_forwardTVC TC AVC MC 15 23 30 Answer the following questions: 1- What is the total fixed cost (TFC) of producing 2 tables?* a. 0 O b 15 O c. 27 d 12arrow_forwardYou are the owner and only employee of a company that sets odds for sporting events. Last year you earned a total revenue of $100,000. Your costs for rent and supplies were $50,000. To start this business you invested an amount of your own capital that could pay you a return of $20,000 a year. Your economic profit last year was O $50,000 O $60,000 O $10,000 O $30,000arrow_forward
- Employment 0 1 2 3 4 5 6 Labor Demand Data Total Product 0 15 28 о Multiple Choice о O $18 $17 39 48 55 60 $15 $16 Product Price $2.20 2.00 1.80 1.60 1.40 1. 20 1.00 The table shows labor demand data on the left and labor supply data on the right. What will be the profit-maximizing wage rate? Labor Supply Data Employment 0 1 2 3 4 LO 5 6 Wage Rate $15.00 16.00 17.00 18.00 19.00 20.00arrow_forwardSuppose that the pen-making industry is perfectly competitive. Also suppose that each current firm and any potential firms that might enter the industry all have identical cost curves, with minimum ATC = $1.25 per pen. If the market equilibrium price of pens is currently $1.50, what would you expect it to be in the long run? LO11.2 a. $0.25. b. $1.00. c. $1.25. d. $1.50.arrow_forwardIndustry Z is made up of the following firms. One firm makes up 40% of the total market sales, one of the firms make up 25%, one of the firms make up 20%, one firm makes up 10%, and the remaining firms make up 5% of the total market sales. What is the HHI for this industry? O 2,730 O 95 O 1.800 O 1,200arrow_forward
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