Homework_1_Answer_Key

Homework_1_Answer_Key - Econ 342 Homework#1 McLeod Due in...

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Econ 342 Homework #1 McLeod Due in class on Wednesday Feb 4. Name (please print or type) ____________________________________ Penn State ID # ______________________________________________ Instructions: Please Read Carefully Please print out this form. There should be five separate sheets of paper. There are a total of 3 problems. Please answer each problem completely. After you have written your answers, please staple the five sheets together at the top left-hand corner. The first sheet is intended only as a cover sheet. Do not write anything on the first sheet except your name and Penn State ID #. There are 100 possible points on this homework assignment. You may work together, but you MUST WRITE UP YOUR OWN WORK and TURN IT IN, IN PERSON, IN CLASS on Wed February 4. PLEASE STAPLE YOUR HOMEWORK!!
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1. (35 points) Suppose honey is produced in a beehive using bees and sugar. Each honey producer uses one beehive which she rents for $10 per month. Producing q gallons of honey requires spending 3q dollars per month on bees, and q 2 dollars per month on sugar. a) (3 points) What is the total cost of producing honey for an individual honey producer? TC = 10 + 3q + q 2 b) (3 points) What is the average cost of producing honey per month for an individual producer? ATC = (10 + 3q + q 2 )/q c) (8 points) In general, if the total cost of producing honey is a + bq + cq 2 , then the marginal cost of producing honey is b + 2cq. Assuming each honey producer operates as a price-taker, what is the supply curve for an individual producer? MC = 3 +2q.
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This note was uploaded on 01/27/2010 for the course ECON 342 taught by Professor Mcleod during the Spring '09 term at Penn State.

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Homework_1_Answer_Key - Econ 342 Homework#1 McLeod Due in...

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