home4a - EC 1, Section 1 UCLA Winter, 2003 A. Bresnock...

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EC 1, Section 1 Student Name: UCLA TA Name/Section: Winter, 2003 A. Bresnock Homework Assignment 4 Answers (20 points) 1. Complete the cost table to make it consistent with the given numbers. Then plot the total cost functions for the range of output 0 - 16 on one diagram, and the average and marginal cost functions on another diagram. L Q TC TFC TVC ATC AFC AVC MC 0 0 25 25 0 --- --- --- 1 4 50 25 25 12.50 6.25 6.25 6.25 2 10 75 25 50 7.50 2.50 5.00 4.17 3 13 100 25 75 7.69 1.92 5.77 8.33 4 15 125 25 100 8.33 1.67 6.66 12.50 5 16 150 25 125 9.37 1.56 7.81 15.00 $ $ MC TC TVC ATC AVC 25 TFC 0 Q 0 Q TC and TVC are reverse “S-shaped” All 3 cost functions are “U-Shaped” and and show diminishing returns. show diminishing returen.
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2 2. A commercial fisherman notices the following relationship between hours spent fishing and the quantity of fish caught. Quantity of Hours Fish (in lbs) TFC TVC TC AFC AVC ATC MC 0 0 $10 $ 0 $10 --- --- --- 1 10 10 5 15 $1.00 $ .50 $1.50 $ .50 2 18 10 10 20 .55 .56 1.11 .63 3 24 10 15 25 .42 .62 1.04 .83 4 28 10 20 30 .36 .71 1.07 1.25 5 30 10 25 35 .33 .43 1.17 2.50 The fisherman has a fixed cost of $10 (his pole). The opportunity cost of his time is $5 per hour.
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home4a - EC 1, Section 1 UCLA Winter, 2003 A. Bresnock...

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