Problem Set 5

# Problem Set 5 - Problem Set 5 Due Monday March 23rd Please...

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Problem Set 5 Due: Monday, March 23rd Please write as neatly as possible and clearly indicate each final answer by circling or double underlining (this is not necessary for graphs). Chapter 8 Questions: 1. The following incomplete table shows a firm’s various costs of producing up to 6 units of output. Fill in as much of the table as possible. If you cannot determine the number in a box, explain why it is not possible to do so. Q TC TVC TFC AC MC AVC 1 18 2 10 3 16 4 66 5 10 18 6 108 2. A firm’s long-run total cost curve is gG±²³ = 40² − 10² ´ + ² µ . Over what range of output does the production function exhibit economies of scale, and over what range does it exhibit diseconomies of scale? 3. Tricycles must be produced with three wheels and one frame for each tricycle. Let Q be the number of tricycles, W be the number of wheels, and F be the number of frames. The price of a wheel is · and the price of a frame is ¸ . a. Calculate the long-run total cost for producing tricycles, TC(Q, · ¸ ). b. What is the production function for tricycles, Q(F, W)? 4.

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Problem Set 5 - Problem Set 5 Due Monday March 23rd Please...

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