ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
4th Edition
ISBN: 9781285423548
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 7, Problem 2.6PA
To determine
The curves in the following graphs
Concept Introduction:
Average Cost refers to total cost of production per unit of output.
Marginal Cost refers to total cost for producing an additional unit of the product.
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Question-1
The table below shows the short run cost for producing bicycles.
Complete all missing values in table below:
Marginal cost
Average total cost
Average variable cost
Average fixed cost
Total cost
Variable cost
Fixed cost
Output
Labor
0
$60
0
0
70$
$60
1
1
$140
$60
6
2
$210
$60
11
3
280$
$60
15
4
$350
$60
13
5
$420
$60
12
6
Draw the short run total cost curve (show the total cost, fixed cost, variable cost).
Where the marginal cost and average total cost intercept? Explain the relationship between the marginal cost and the average total cost with the help of graph.
1a.
Define average product and marginal product. Briefly explain reasons for a diminishing marginal product.
b.
What are three stages of production? Which stages reflect a firm’s observed behavior versus experimental situation? Briefly justify your answer.
Figure 6.4 above shows the isoquants for the production of steel. In which regions of production are there increasing, decreasing, and constant returns to scale?
Chapter 7 Solutions
ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
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Similar questions
- (6) If marginal product is greater than average product (a) total product must be increasing. (b) marginal product must be decreasing. (c) marginal product must be increasing. (d) average product may be increasing or decreasing.arrow_forwardThe Production Function for Wilson Company Economists at the Wilson Company are interested in developing a production function for fertilizer plants. They collected data on 15 different plants that produce fertilizer PLANT OUTPUT (TONS) CAPITAL ($) LABOUR (HOURS) 1 605.3 18,891 700.2 2 566.1 19,201 651.8 3 647.1 20,655 822.9 4 523.7 15,082 650.3 5 712.3 20,300 859.0 6 487.5 16,079 613.0 7…arrow_forwardQuestion 2.A From the table below illustrate the data in the table by graph Table 1. Find ; TP, MPL and APL Labor Total product Marginal product Average product 0 0 1 15 2 30 3 40 4 45 5 50 6 50arrow_forward
- Question 17 The ________ marginal product of labor occurs because the amount of fixed inputs per labor declines as more workers are hired.The average product of labor__________ if the marginal product of labor is greater than the average product of labor.Increasing: DecreasesDiminishing: DecreasesDiminishing: Increases Increasing: Increasesarrow_forwardShow and explain the relationship between total product, average product and marginal product.arrow_forwardM/c question - Micro 21)For a firm, what does the production function represent? A. the relationship between quantity of output and total cost B. the relationship between implicit costs and explicit costs C. the relationship between quantity of inputs and quantity of output D. the relationship between quantity of inputs and total cost 20) In the long-run, what happens to inputs? A. Inputs that were fixed in the short run become variable B. Inputs that were variable in the short run will decrease C. Inputs that were variable in the short run will increase D. Inputs that were fixed in the short run remain fixedarrow_forward
- Graph Total Product, Average Product and Marginal Product curves from the table given Subject: Business Outsourcingarrow_forward(12) When marginal product reaches its maximum, what can be said of total product? (a) total product must be at its maximum (b) total product starts to decline even if marginal product is positive (c) total product is increasing if marginal product is still positive (d) total product levels offarrow_forward(a) What is the difference between average product of labor and marginal product of labor? (b) Explain the relationship between average and marginal product of an input by discussing their respective curves (no need to provide any graphs).arrow_forward
- ASAP!! ANSWER PLEASE Hammas Dadani operates a business and uses the following table for total output or total product as a function of labor units used. LABOR TOTAL OUTPUT 0 0 1 5 2 9 3 12 4 14 5 15 Calculate Marginal Product of Labor and Average Product of Labor? Plot a graph for total product, marginal product and average product separately? Does the graph indicate a situation of diminishing returns? Explain your answer.arrow_forward1.What is the total quantity produced when the firm employs 8 workers? ___ Units 2. What is the average product of labor when the firm employs 14 workers? ____ Units 3. The firm begins to experience diminishing returns after ___ Workers are hiredarrow_forwardExplain why the short run production curve is a “s” shape curve. Answer in detail including graph and examplearrow_forward
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