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Points Awarded100.00Points Missed0.00Percentage100%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 BTABLE B- The wage is still $150 and the price of output (Q) is now $22.L QMPLMRPMarginal ProfitTotal Profit0 0---------------------01 88$$$2 2012$$$3 288$$$4 357$$$5 416$$$6 454$$$Table for Individual Question FeedbackPoints Earned:9.0/9.01762626264114140176261661544170132-1815288-6290
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: 902.Use Scenario B/Table B to answer the questions 2 – 4 below.(3 points) The profit maximizing output (Q) is .Table for Individual Question FeedbackPoints Earned:3.0/3.03.(3 points) The profit maximizing level of labor (L) input is workers.Table for Individual Question FeedbackPoints Earned:3.0/3.04.(3 points) The maximum profit for this firm is .Table for Individual Question FeedbackPoints Earned:3.0/3.0354
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 to Graph 1. Label the new profit maximizing Q and L combination on the production function as point B.Table for Individual Question FeedbackPoints Earned:2.0/2.0Correct Answer(s):6.
(3 points) Using Scenario B/Table B, go to Graph 2 and draw this firm’s newMRP 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 FeedbackPoints Earned:3.0/3.0
(3 points) Using Scenario B/Table B, draw this firm’s Supply curve on Graph 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 answerfor #2 above). Connect the two points and label your supply curve.