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Problem Set 4 - John(J.C Stevens EC205L Section 216 Problem...

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John (J.C.) Stevens EC205L- Section 216 Problem Set #4 This problem set is due at the beginning of class on 3/16/05 You may work with one other person. You should work only with that partner—that means two groups should not get together and work as a team of four. Please answer all questions to the best of your ability. Circle the multiple choice answer of your choice, and then explain why your answer is correct. It is possible to earn partial points, so do the best you can. NO CREDIT WILL BE GIVEN FOR ONLY SELECTING A MULTIPLE CHOICE ANSWER. 1. Revenue and Cost Data for a Competitive Firm (in dollars) Total Total Total Fixed Variable Total Output Price Revenue Cost Cost Cost Profit 0 5 0 100 0 100 -100 10 5 50 100 20 Y - 70 20 Z X 100 30 130 - 30 The table above shows revenue and cost data for a competitive firm. What are the values of the variables X, Y, Z? a) $100, $120, $5 b) $100, $150, $10 c) $140, $70, $7 d) $120, $120, $6 The correct answer is A. X equals 100 because the profit is the total revenue minus the total cost (130-100=-30). Y equals 120 because the total cost is the total fixed cost plus the total variable
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