Homework Set 3 - Homework Set 3 Chapters 6 7 Eco F304K...

Info icon This preview shows pages 1–2. Sign up to view the full content.

Homework Set 3: Chapters 6 & 7 Eco F304K Summer, 2008 Due Date: 6/26/08   Chapter 6: Perfect Competition 1. The following exercise reviews calculation of total revenues, total costs and profits for a firm Output Employee  Hours Output  Price Rent Wage  Rate Total  Revenues Total Costs Profits/Losse s 0 0 $3 $75 $4 15 3 $3 $75 $4 30 7 $3 $75 $4 45 12 $3 $75 $4 60 18 $3 $75 $4 75 25 $3 $75 $4 90 37 $3 $75 $4 A. Calculate the values for total revenues, total costs, and profits or losses (use a minus sign for losses). B. For the data in table, the profit-maximizing level of output is (75/90) _______ units, with a profit of ($47/$50) _____. C. Suppose that the rent on the office space the firm is using increased from $75 to $95 while all other variables remain  unchanged. The new profit-maximizing level of output is (60/75) ______ units with a (profit/loss) _______ of ($30/-$30)  _________. D. The results in part C indicate that when the cost of a (fixed/variable) ______ factor of production change, the optimal level of  production (remains the same/changes) _______, but the level of profits or losses (remains the same/changes)  _____________. E. Suppose the price the firm receives increases from $3 to $5, while all other variables are at the original values.  The new  profit-maximizing level of output is (75/90) ______ with a profit of ($227/$200) ______.
Image of page 1

Info icon This preview has intentionally blurred sections. Sign up to view the full version.

Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern