AP Micro Take Home 3 Production Costs and PC Student(1).doc

AP Micro Take Home 3 Production Costs and PC Student(1).doc...

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NAME: _________________________ DATE: ___/___/___ PERIOD: _______ Unit 3: Costs of Production and Perfect Competition Problem Set #3 1. Explain an example that demonstrates the “real world” application of each of the following. Define the terms in your own words and use examples that clearly demonstrate your understanding of each concept. a. The Law of Diminishing Marginal Returns (____/5) b. Fixed Costs, Variable Costs, and Total Cost (____/5) c. Accounting Profit and Economic Profit (____/5) d. Economies of Scale and Diseconomies of Scale (____/5) 2. Productivity and Costs a. Complete the worksheet “Production Function for Tony’s Hat Store” (____/5) b. Complete worksheet titled “Cost and Competitive Market Supply” (____/5) c. Explain the relationship between the marginal product curve and the marginal cost curve. In your response, explain why the marginal cost curve is “U” shaped using numerical examples. (____/5) 3. Below is information regarding Cory’s Surfboard Inc. Complete the table and do the following (____/5): a. On a large graph, plot the MC, AFC, AVC, and ATC curves from this data
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