homework5KEYa - known as diminishing marginal returns The 2...

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Principles of Microeconomics Homework #5 Due: Friday October 12, 2007 ANSWER KEY 1. The following is a partial cost schedule for Sarah’s Printing Company. workers Output MP TFC TVC AFC  AVC ATC TC MC 0.00 0.00 110.00 0.00 #DIV/0! #DIV/0! #DIV/0! 110.00 1.00 12.00 12.00 110.00 30.00 9.17 2.50 11.67 140.00 2.50 2.00 31.00 19.00 110.00 60.00 3.55 1.94 5.48 170.00 1.58 3.00 41.00 10.00 110.00 90.00 2.68 2.20 4.88 200.00 3.00 4.00 50.00 9.00 110.00 120.00 2.20 2.40 4.60 230.00 3.33 5.00 58.00 8.00 110.00 150.00 1.90 2.59 4.48 260.00 3.75 6.00 64.00 6.00 110.00 180.00 1.72 2.81 4.53 290.00 5.00 7.00 67.00 3.00 110.00 210.00 1.64 3.13 4.78 320.00 10.00 1. Complete the above table. 2. Graph the MP curve. What is happening to marginal product? At which output level is MP greatest? The marginal product rises at first then falls, which is
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Unformatted text preview: known as diminishing marginal returns. The 2 nd worker has the highest Marginal product. MP 2 4 6 8 10 12 14 16 18 20 0.00 2.00 4.00 6.00 8.00 MP 3. Graph the ATC and MC curves. 2 4 6 8 10 12 14 20 40 60 80 MR ATC MC 4. Graph the MR=P curve if the market price for books is $5.00. 5. If the market price for blank books is $5.00, which output level would be profit maximizing? Profit maximizing level of output is 64. 6. If the market price for blank books is $3.00, which output level would be profit maximizing (loss-minimizing)? Profit maximizing level of output is 41....
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This note was uploaded on 03/26/2008 for the course ECON 12200 taught by Professor Ostereich during the Fall '07 term at Ithaca College.

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homework5KEYa - known as diminishing marginal returns The 2...

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