WS2A4 - WS2A4 1 WS2A4 Mary Batchelor Indiana Wesleyan...

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WS2A4 1 WS2A4 Mary Batchelor Indiana Wesleyan University
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WS2A4 Chapter 5 9. Suppose that 50 units of a good are demanded at a price of $1 per unit. A reduction in price to $0.20 results in an increase in quantity demand to 70 units. Show that these data yield a price elasticity of 0.25. By what percentage would a 10 percent rise in the price reduce the quantity demanded, assuming price elasticity remains constant along the demand curve? .25=.05/.20 .25=x/.22 X=0.055 70*0.055=3.85 less demanded Chapter 7 18. Complete the following table, assuming that each unit of labor costs $75 per day. Quantity of labor per day output per day Fixed costs Variable Cost Total Cost marginal Cost 0 $0 $300 0 300 - 1 5 300 75 375 15 2 11 300 150 450 12.5 3 15 300 225 525 18.75 4 18 300 300 600 25 5 20 300 375 675 37.5 a. Graph the fixed costs, variable cost, and total cost of curves for this data.
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b. What is the marginal product of the third unit of labor? 6.25 c. What is the average total cost when output is 18 units per day?
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WS2A4 - WS2A4 1 WS2A4 Mary Batchelor Indiana Wesleyan...

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