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HW3 - ECO 201 Homework#3 50 Points Topics 14 through 19 The...

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ECO 201 – Homework #3 50 Points Topics 14 through 19 The homework must be completed by 10PM on Thursday, July 17. 1. Marginal revenue is: a. the change in total revenue divided by total output b. total revenue divided by total output c. total revenue minus total cost then divided by total output d. the change in total revenue divided by the change in price of output e. the change in total revenue divided by the change in total output 2. Which of the following will always equal zero when the firm's output level is zero? 3. The change in cost to the firm from producing one additional unit of output is: 4. As a firm increases its output in the short run, average fixed cost: 5. Which of the following is true about the relationships among various cost curves? a. when MC exceeds ATC, ATC must be rising b. when MC exceeds ATC, ATC could be rising or falling c. when ATC is falling, MC must exceed ATC d. when TC is rising, MC must exceed TC e. TC falls when AFC falls 6. Assume that a firm has a wage rate of $300. If the firm's AVC is $2, its APL is: 7. If Carol's Crayon Factory's price exceeds its average total cost in the short run, then:
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Use the following table for questions 8 through 14. K L q 4 0 0 4 1 60 4 2 115 4 3 165 4 4 210 4 5 250 4 6 285 Assume that each unit of capital employed costs $200 and the wage rate is $50. 8. What is the total fixed cost of producing 165 units? 9. What is the total variable cost of producing 165 units? a. $50 b. $100 c. $150 d. $200 e. $250 10. What is the total cost of producing 165 units? 11. What is the average fixed cost of producing 165 units? 12. What is the average variable cost of producing 165 units? 13. What is the average total cost of producing 165 units? a. $0.91 b. $1.00 c. $2.50 d. $4.85 e. $5.76
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14. What is the marginal cost of producing 165 units? 15. When marginal cost exceeds marginal revenue:
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