Econ 101-homework4

# Econ 101-homework4 - Econ 101 Homework 4 Fall 2007 Due in...

This preview shows pages 1–3. Sign up to view the full content.

Econ 101 Homework 4 Fall 2007 Due 11/12/2007 in lecture Directions: The homework will be collected in a box before the lecture. Please place your name , TA name and section number on top of the homework (legibly). Make sure you write your name as it appears on your ID so that you can receive the correct grade. Please remember the section number for the section you are registered, because you will need that number when you submit exams and homework. Late homework will not be accepted so make plans ahead of time. Good luck! 1. Production and Costs Complete the following table. The total fixed cost is \$450. The firm is a price-taker in the labor market, so the wage rate is constant. Quantity Labor FC VC TC AFC AVC ATC MC MPL 0 0 -- -- -- -- -- 5 1 540 20 2 45 3 60 4 70 5 75 6 Use the information you calculated in the table above to answer the following questions. a. At what level of output and labor usage does marginal cost attain its minimum? b. At what level of output and labor usage is ATC at its minimum? c. At what level of labor usage does the law of diminishing returns first occur? d. When output is equal to zero units, why does the firm still incur costs? Explain your answer.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
e. As output increases, why does AVC first decrease, but then eventually increase?
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern