ECON/FRE 374 – Problem Set 6
Due: 1 PM, Friday, December 2, 2005
Instructions: a) Your grade on this problem set will be determined by
randomly
grading a
single problem from the set below.
It is thus important to do each question carefully as
any one problem could determine your grade.
b) Problem sets are to be handed in at
Emmanuel Villanueva’s office (McM 336). Please do not upload your problem sets in
webct. c) Any problem set received after the time it is due will not be graded. d) Please
label and mark all graphs clearly.
1.
Karine is a landowner in Quebec.
She owns two fields and grazes cows on both.
Field 1 has a natural pond; in Field 2 Karine must pump in water.
The total cost of
producing tankers of milk (q) in each field is represented by:
TC
1
= 20 + 5q
2
and TC
2
= 50 + 5q
2
.
The price of milk is set at p = 40.
a)
Write down the formulas for average and marginal cost in each field.
Plot AC
1
and MC
1
on one diagram and AC
2
and MC
2
on another.
b)
This preview has intentionally blurred sections. Sign up to view the full version.
View Full Document
This is the end of the preview.
Sign up
to
access the rest of the document.
 Spring '10
 varies
 Hydrology, Supply And Demand, Great Lakes

Click to edit the document details