Question

please answer all questions!!!

When do constant returns to scale occur when long-run total costs are constant as output increases when long-run average total costs are constant as output increases when the firm's long-run average-cost curve is falling as output increases when the firm's long-run average-cost curv is rising as output increases

Answer 1

Q1. when long run average total costs are constant as output increases.

Q2. $4

Total no of units = 5000

Total variable costs = 25000

Total cost = 45000

Total fixed cost = 45000-25000 = 20000

Average fixed cost = 20000/5000 =4

Q3. 18 units of output.

Total output with 15 workers was 160

Total output with 16 workers is 178

Marginal product of 16th worker is 178-160= 18

Marginal product is the additional output produced by employing one more worker.

Q4. -$30

By working for 10 hours on fields, he forgoes 10*$50 = $500.

Because, he could have earned $500 by taking guitar classes for 10 hours.

So, his implicit costs are $500. (This is also called opportunity cost)

He plants $130 worth of seeds. His explicit cost is $130.

Total cost is the sum of implicit and explicit costs. So, total cost is $500+$130 = $630.

Value of expected yield is $600.

So, total economic profit is $600-$630 = $30

Q5. $5000

Total no of units sold = 5000

Selling price = $10

So, total revenue = $10*5000 =$50000

Total costs = $45000

Economic profit = Total revenue - total cost = 50000-45000

= 5000.