problem set 4_econ2302

Principles of Microeconomics (7th Edition) (Case/Fair Economics 7e Series)

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Economics 2302 Principles of Microeconomics Professor McFarlin University of Texas at Dallas Problem Set 4 [Note: Problem sets in this class will not be collected or graded.] 1. Suppose you are the manager of a fast-food restaurant. Your capital choices are fixed in the short run, but you can vary the # of workers you use each day. The following table summarizes your production possibilities: # workers per day meals per day 0 0 1 30 2 70 3 100 4 120 5 130 6 135 7 140 8 140 a. Calculate the average product of labor and the marginal product of labor for each level of labor input. Graph your answer and explain why the two curves, MPL and APL, rise and fall as you have drawn. b. Suppose that the current wage rate for restaurant employees is $40 per day and that the rental of the restaurant building and property amounts to $60 per day. Compute the total variable cost, marginal cost, average variable cost, total fixed cost, average fixed cost, total cost, and average (total) cost for each line of the above table. c.
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problem set 4_econ2302 - Economics 2302 Professor McFarlin...

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