Economics: Principles & Policy
14th Edition
ISBN: 9781337696326
Author: William J. Baumol; Alan S. Blinder; John L. Solow
Publisher: Cengage Learning
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Question
Chapter 8.A, Problem 2TY
To determine
Instance of falling marginal grades and rising average grades.
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Students have asked these similar questions
Consider the table below that describes the costs associated with producing a good (Q).
Q
Total Variable Cost
Total Cost
0
0
30
1
30
60
2
50
80
3
65
95
4
77
107
5
87
117
6
100
130
7
120
150
8
160
190
9
220
250
10
300
330
What is the value of the marginal cost of producing the second unit? Enter your answer as a number below. Do not include a "$" sign.
what are two key problems that arise for the modern marginalist theory of the firm when
the firm has a constant-returns-to-scale (CRS) technology?
When thinking about cost analysis in Microeconomics, what are the real-world problems that occur when applying theories of scale? Describe and give an example of each.
Chapter 8 Solutions
Economics: Principles & Policy
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Similar questions
- According to the fallacy of composition, "What is true for one is not true for all." Select one: True Falsearrow_forwardExplain how studying for an exam is subject to the law of diminishing marginal productivity. The law of diminishing marginal productivity implies that the optimal amount of studying is however many hours will lead to your highest possible score. After this point, your performance falls and you should not study any more. Assuming you organize your studying reasonably, you will focus on the parts of the text that are most likely to show up on the exam and most likely to raise your grade. As you study less relevant material, your additional time spent studying will yield fewer additional points on the exam. At some point, additional studying can have a negative return. The law of diminishing marginal productivity pertains to studying in a group only. If you study with one or two people, your grade will likely improve because they can teach you information you don’t know. However, at some point, as you add another person, the grades for everyone decline. The more and…arrow_forwardExplain why optimal marks- up varyarrow_forward
- Consider the table below that describes the costs associated with producing a good (Q). Q Total Variable Cost Total Cost 0 0 30 1 30 60 2 50 80 3 65 95 4 77 107 5 87 117 6 100 130 7 120 150 8 160 190 9 220 250 10 300 330 What is the value of the average total cost when Q=2? Enter your answer as a number below. Do not include a "$" sign.arrow_forwardExtra The problem of principle agent can be reduced if it is possible to pay the worker a) weekly salary b) a wage based on the number of units produced c) an hourly wage d) out of retained earnings The law of diminishing returns results in a) an eventually rising marginal product curve b) a total product curve that eventually increases at a decreasing rate c) an eventually failing marginal cost curve d) a total product curve that rises indefinitely Which of the following is an example of the prinicipal/agent problem? a) A consumer buys a defective good because she does not know the quality of the good b) A sports agent invests money for a client and the company he invests in goes busy so the athlete doesnt get back the principal on his investment c) a worker shirks off while his boss is on vacation d) a company continues to produce despite losses because of fixed costsarrow_forwardAt what level of production does the marginal cost have the least value? What is the marginal cost at this level of production?arrow_forward
- Suppose a hugely successful Web company has used freeconomics, expanded its scale of operations, and spread its long-run costs over larger and larger audiences. However, after years of profits, its continued growth has now caused the company’s profits to fall. Using production costs theory, explain why this situation might be occurring.arrow_forwardDiscuss the impact of the following factors on the optimal method of procuring an input. a. Benefits from specialization. b. Bureaucracy costs.c. Opportunism on either side of the transaction. d. Specialized investments. e. Unspecifiable events. f. Bargaining costs.arrow_forward
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