Wendell's Widget Works (www)faces the following cost schedule:
a. Fill in the table and graph
b. From these cost curves can you tell where diminishing marginal product sets in? Explain
c. what is the relationship between TC. VC. and FC ? explain
d. What is the relationship between ATC, AVC, and AFC? explain
e. What is the relationship between ATC, and MC? Between AVC and MC?
f. At what level of output is Wendell most efficient? (by the way, economists call this the "efficient scale". Explain
Homework Answers
a)
b) From 6th unit.
c) TC = TFC + TVC
TFC is horizontal line because fixed cost remains same at each level of output.
TVC is the upward sloping curve.
TC is parallel to TVC of firm.
d) AFC is downward sloping curve as TFC remains same with increase in output.
AVC and ATC is U shaped. ATC lies above AVC because ATC includes AVC and AFC.
a) The following tables gives you the cost schedule fora firm producing sugar. Calculate the average...
a) The following tables gives you the cost schedule fora firm producing sugar. Calculate the average costs and the marginal cost and complete the cost schedule Output(tons) FC(S) VCIS) TC(S) AFC(S) AVC(S) ATC(S) MC(S) 450 250 200 300 200 500 350 200 570 400 200 660 450 200 780 b) Draw the typical shapes of the average costs (AFC, AVC, ATC) and MC c) Explain briefly the relationship between MC and ATC.
pogu u (a) Calculate the fixed cost (FC), average fixed cost (AFC), average variable cost (AVC),...
pogu u (a) Calculate the fixed cost (FC), average fixed cost (AFC), average variable cost (AVC), average total cost (ATC) and marginal cost (MC) from the table below. Units of output Total cost AFC ATC FC 50 AVC 0 0 MC 0 0 80 128 180 280 405 (b) Draw graphs to plot these cost curves against output. (c) Explain what these shapes tell us about returns and efficiency.
Find TC, MC, AFC, AVC, and ATC from the following table. Instructions: Enter your responses rounded...
Find TC, MC, AFC, AVC, and ATC from the following table. Instructions: Enter your responses rounded to two decimal places. Units (Q) VC($) TC($) MC($) | AFC($) AVC($) ATC($) FC($) 100 100 100 100 100 100 40 60 TDTT 70 85 130 (Note: Marginal costs should be interpreted as between levels of output.)
Find FC, VC, TC, AFC, AVC, ATC, and MC from the following table. Capital costs $50 per unit, and two units of capital a...
Find FC, VC, TC, AFC, AVC, ATC, and MC from the following table. Capital costs $50 per unit, and two units of capital are used in the short run. Labor costs $20 per unit. 7. Total Cost Average Average Marginal Variable Cost |(MC) Fixed Units of Units of Variable Average Fixed Labor (L) Cost (FC) Cost (VC) (TC) Total Cost Output (ATC) (Q) Cost Cost (AFC) (AVC) 0 0 1 2 2 4 3 6 4 8 10
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D Question 7 1 pts Use the following graph that shows the marginal cost (MC) curve, the Average Variable Cost (AVC) curve, and the Average Total Cost (ATC) curve. What is the variable cost when the quantity (Q) being produced is 6? P MC ATC /AVC $15 $11 $8 Q O $66 $8 O $15 $11 Question 8 1 pts Use the following graph that shows the marginal cost (MC) curve, the Average Variable Cost (AVC) curve, and the Average...
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The cost of producing x units of a commodity is given by. TC(x)=100+40x+2x^2 Derive the following functions: FC = VC = AFC = AVC = ATC = Find TC(x+1)-TC(x), and explain in words what this means.
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The total cost (TC) of producing computer software diskettes (Q) is given as: TC = 100 + 10Q. What is the; a. fixed cost (FC), b. variable cost (VC), c. marginal cost (MC), d. average fixed cost (AFC), e. average variable cost (AVC), f. average total cost (ATC)?
Mankiw, page 265, question 7. Your cousin Vinnie owns a painting company with fixed costs of...
Question 1Mankiw, page 265, question 7. Your cousin Vinnie owns a painting company with fixed costs of $200 and the following schedule for variable costs. Calculate average fixed cost (AFC), average variable cost, (AVC) and average total cost (ATC) for each quantity. Note: Recall that • AFC = FC/Q • AVC = VC/Q • ATC = TC/Q or ATC = AFC + AVC where TC = FC + VC I. What is AFC when output is Q = 2? II. What is AVC when output is...
Match various cost measures to their descriptions: • The overall cost of inputs that vary with...
Match various cost measures to their descriptions: • The overall cost of inputs that vary with output: • The average per unit cost if both costs that do and do not vary with output are included: ATC= • The increase in the total cost from a 1 unit increase in output: MC Check Match various cost measures to their descriptions: • The overall cost of inputs that vary with outpu t vary with output are included: ATC The average per...
The cost table below has enough information for you to completely fill out the blanks in...
The cost table below has enough information for you to completely fill out the blanks in the five rows (output 0, 1, 2, 3, 4). Here is a hint: at Q=4 you are told that AFC is 30. Since AFC=FC/Q, you know that FC must be 120. And, of course FC is the same for all output levels, including zero. Now you have the first column completed! FC VC TC MC AFC AVC ATC 10 168
a) The following tables gives you the cost schedule fora firm producing sugar. Calculate the average costs and the marginal cost and complete the cost schedule Output(tons) FC(S) VCIS) TC(S) AFC(S) AVC(S) ATC(S) MC(S) 450 250 200 300 200 500 350 200 570 400 200 660 450 200 780 b) Draw the typical shapes of the average costs (AFC, AVC, ATC) and MC c) Explain briefly the relationship between MC and ATC.
pogu u (a) Calculate the fixed cost (FC), average fixed cost (AFC), average variable cost (AVC), average total cost (ATC) and marginal cost (MC) from the table below. Units of output Total cost AFC ATC FC 50 AVC 0 0 MC 0 0 80 128 180 280 405 (b) Draw graphs to plot these cost curves against output. (c) Explain what these shapes tell us about returns and efficiency.
Find TC, MC, AFC, AVC, and ATC from the following table. Instructions: Enter your responses rounded to two decimal places. Units (Q) VC($) TC($) MC($) | AFC($) AVC($) ATC($) FC($) 100 100 100 100 100 100 40 60 TDTT 70 85 130 (Note: Marginal costs should be interpreted as between levels of output.)
Find FC, VC, TC, AFC, AVC, ATC, and MC from the following table. Capital costs $50 per unit, and two units of capital are used in the short run. Labor costs $20 per unit. 7. Total Cost Average Average Marginal Variable Cost |(MC) Fixed Units of Units of Variable Average Fixed Labor (L) Cost (FC) Cost (VC) (TC) Total Cost Output (ATC) (Q) Cost Cost (AFC) (AVC) 0 0 1 2 2 4 3 6 4 8 10
D Question 7 1 pts Use the following graph that shows the marginal cost (MC) curve, the Average Variable Cost (AVC) curve, and the Average Total Cost (ATC) curve. What is the variable cost when the quantity (Q) being produced is 6? P MC ATC /AVC $15 $11 $8 Q O $66 $8 O $15 $11 Question 8 1 pts Use the following graph that shows the marginal cost (MC) curve, the Average Variable Cost (AVC) curve, and the Average...
Question 1Mankiw, page 265, question 7. Your cousin Vinnie owns a painting company with fixed costs of $200 and the following schedule for variable costs. Calculate average fixed cost (AFC), average variable cost, (AVC) and average total cost (ATC) for each quantity. Note: Recall that • AFC = FC/Q • AVC = VC/Q • ATC = TC/Q or ATC = AFC + AVC where TC = FC + VC I. What is AFC when output is Q = 2? II. What is AVC when output is...
Match various cost measures to their descriptions: • The overall cost of inputs that vary with output: • The average per unit cost if both costs that do and do not vary with output are included: ATC= • The increase in the total cost from a 1 unit increase in output: MC Check Match various cost measures to their descriptions: • The overall cost of inputs that vary with outpu t vary with output are included: ATC The average per...
The cost table below has enough information for you to completely fill out the blanks in the five rows (output 0, 1, 2, 3, 4). Here is a hint: at Q=4 you are told that AFC is 30. Since AFC=FC/Q, you know that FC must be 120. And, of course FC is the same for all output levels, including zero. Now you have the first column completed! FC VC TC MC AFC AVC ATC 10 168
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