Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 19, Problem 6MCQ
To determine
To choose:
The option that correctly explains what a firm does to maximize the profit.
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What does the Law of Supply state?
Why do supply and demand curves slope in opposite directions?
How is the elasticity of supply affected by the way a product is produced?
Explain the difference between a total product and a marginal product.
What is the difference between a fixed cost and a variable cost?
Note: use references from published scientific articles
a) identify which of production level that marginal revenue decreases start to occur (with supposition price factor does not change)
b) identify which of production level and price that can provide maximum profit.
1. A firm’s production function is , where Ldenotes the size of the workforce. Find the value of MPLin the case when:
(a) L=1, (b) L=10, (c) L=100, (d) L=1000
Does the law of diminishing marginal productivity apply to this particular function?
2. Show that the price elasticity of demand is constant for demand functions of the form
where A and n are positive constants.
3. The demand and total cost functions of a good arerespectively and
a) Find expressions for TR, (profit) , MR, and MC in terms of Q.
b) Solve the equation
and hence determine the value of Q which maximizes profit.
c) Verify that, at the point of maximum profit, MR=MC.
4. The cost of building an office complex, x floors high, in a prime location in Accra is made up of three components:
(a) GH¢10 million for the land
(b) GH¢1/4 million per floor
(c) Specialized costs of GH¢10000x per floor.
How many floors should the office complex contain if the average cost per floor is to be minimized?
5. The supply…
Chapter 19 Solutions
Foundations of Economics (8th Edition)
Ch. 19 - Prob. 1SPPACh. 19 - Prob. 2SPPACh. 19 - Prob. 3SPPACh. 19 - Prob. 4SPPACh. 19 - Prob. 5SPPACh. 19 - Prob. 6SPPACh. 19 - Prob. 7SPPACh. 19 - Prob. 8SPPACh. 19 - Prob. 9SPPACh. 19 - Prob. 10SPPA
Ch. 19 - Prob. 1IAPACh. 19 - Prob. 2IAPACh. 19 - Prob. 3IAPACh. 19 - Prob. 4IAPACh. 19 - Prob. 5IAPACh. 19 - Prob. 6IAPACh. 19 - Prob. 7IAPACh. 19 - Prob. 8IAPACh. 19 - Prob. 9IAPACh. 19 - Prob. 1MCQCh. 19 - Prob. 2MCQCh. 19 - Prob. 3MCQCh. 19 - Prob. 4MCQCh. 19 - Prob. 5MCQCh. 19 - Prob. 6MCQCh. 19 - Prob. 7MCQ
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