Assign WK 3

# Assign WK 3 - (c The government imposes a fixed amount of...

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1. Consider a firm that has just built a plant, which cost \$20,000. Each worker costs \$5.00 per h Output Variable Cost Marginal Cost AVC 0 0 20000 0 20,000 50 400 8.00 20000 250 20,250 0.63 0.63 100 900 10.00 20000 500 20,500 0.50 0.56 150 1300 8.00 20000 750 20,750 0.63 0.58 200 1600 6.00 20000 1000 21,000 0.83 0.63 250 1800 4.00 20000 1250 21,250 1.25 0.69 300 1900 2.00 20000 1500 21,500 2.50 0.79 350 1950 1.00 20000 1750 21,750 5.00 0.90 2. How would each of the following affect the firm's marginal, average, and average variable co (a) An increase in wages cause an upward shift in the marginal, average total and average variable co (b) A decrease in material costs shifts the marginal, average total and average variable cost curves up

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Unformatted text preview: (c) The government imposes a fixed amount of tax. This leads to an upward shift in the marginal, the (d)The rent that the firm pays on the building that it leases decreases would cause no real shift to the # of Worker Hours Marginal Product Fixed Cost Total Cost hour. Based on this information, fill in the table in the Excel file. ATC 50.63 22.78 15.96 13.13 11.81 11.32 11.15 ost curves? ost curves. pwards. e average total and the average variable cost curves by the amount of tax. marginal or average variable cost. Because it’s a FC this would shift the average fixed cost curve....
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