# PSU ECON 104 Homework 3 - Points Awarded 91.75 Points...

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Points Awarded91.75 Points Missed8.25 Percentage91.8% 1. SCENARIO B:Suppose that due to favorable economic conditions, the price that this firm can sell its product for rises to \$22. For question 1. Fill in Table B - Each box is worth ½ point for a total of 9 points for Table B TABLE B- The wage is still \$150 and the price of output (Q) is now \$22. L QMPL MRPMarginal ProfitTotal Profit 0 0---------------------1 88\$176\$26\$ 2 20 12 \$264\$114\$ 140 3 28 8\$176\$26\$ 166 4 35 7\$154\$4\$ 170 5 41 6 \$132\$-18\$ 152 6 45 4\$88\$-62\$ 90 0 26 Table for Individual Question Feedback Points Earned:9.0/9.0 Correct Answer(s): Box 1: 176; Box 2: 26; Box 3: 26; Box 4: 264; Box 5: 114; Box 6: 140; Box 7: 176; Box 8: 26; Box 9: 166; Box 10: 154; Box 11: 4; Box 12: 170;
Box 13: 132; Box 14: -18; Box 15: 152; Box 16: 88; Box 17: -62; Box 18: 90 2. Use Scenario B/Table B to answer the questions 24 below. (3 points) The profit maximizing output (Q) is35 . Table for Individual Question Feedback Points Earned:3.0/3.0
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3. (3 points) The profit maximizing level of labor (L) input is4 workers. Table for Individual Question Feedback Points Earned:3.0/3.0 Correct Answer(s):4 4. (3 points) The maximum profit for this firm is170 . Table for Individual Question Feedback Points Earned:3.0/3.0
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5. DOWNLOAD AND PRINT GRAPHING TEMPLATE (available in the homework 3 instructions). This template already shows the outcome from scenario A. You will be adding results from scenario B to these graphs. (2 points) Using Scenario B/Table B, go toGraph 1. Label the new profit maximizing Q and L combination on the production function as point B.
Table for Individual Question Feedback Points Earned:2.0/2.0 Correct Answer(s): 6. (3 points) Using Scenario B/Table B, go toGraph 2and draw this firm’snew MRP curve (remember that MRP = P* MPL, and since price changed, we know we have a new MRP curve!). Shade in the new area of profit. Also label the new profit maximizing point as letter B. Table for Individual Question Feedback Points Earned:3.0/3.0 Correct Answer(s): 7.
(3 points) Using Scenario B/Table B, draw this firm’s Supply curve onGraph 3. You should construct a supply curve as we did in lecture with point A representing the original price and output combination from scenario A (original price was \$20 combined with the profit maximizing Q of 28) and point B representing the price and output combination after the change in economic conditions in Scenario B (price rose to \$22, and the profit maximizing Q you found in your answer for #2 above). Connect the two points and label your supply curve.

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