Homework_6 - Homework #6 1. [McEachern, p. 167, #7] What is...

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1 Homework #6 1. [McEachern, p. 167, #7] What is the difference between fixed cost and variable cost? Does each type of cost affect marginal cost? Explain. 2. [McEachern, p. 167, #8] Explain why the marginal cost of production must increase if the marginal product of the variable resource is decreasing. 3. [McEachern, p. 167, #9] What effect would each of the following have on a firm’s marginal cost curve and its fixed cost curve? a. An increase in the wage rate b. A decrease in property taxes c. A rise in the purchase price of new capital d. A rise in energy prices 4. [McEachern, p. 168, #19] Complete the following table, where L is units of labor, Q is units of output, and MP is the marginal product of labor. L Q MP VC TC MC ATC 0 0 0 12 1 6 3 15 2 15 6 3 21 9 4 24 12 5 26 15 a. At what level of labor input do the marginal returns to labor begin to diminish? b. What is the average variable cost when Q = 24? c.
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Homework_6 - Homework #6 1. [McEachern, p. 167, #7] What is...

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