Extra practice questions CH9 sample solution

Extra practice questions CH9 sample solution - TVC(q=32 =...

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Extra practice questions CH9 sample solution 1. The table gives the output that Terry's T Shirts can produce in the short-run. Labor(workers per day) Output (T shirts per day) Marginal product Average product 0 0 ---- 1 8 8 8 2 18 10 9 3 26 8 8.66 4 32 6 8 5 36 4 7.2 (a) Compute the average products the marginal products. (b) Diminishing marginal returns begin when the 3 rd (c) If each work is paid $10 a day and the total fixed cost is $100 a day, what are the average variable cost and the average total cost when 32 T shirts are produced? work is employed.
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Unformatted text preview: TVC(q=32) = 4(workers) x $10 per worker = $40 TFC=$100 AVC(q=32)= TVC/q = $40/32 ATC(q=32)= TC/q = ($100+$40)/32 2. The table gives the cost of producing T shirts in the short-run. Output (T shirts per day) Total cost Total variable cost 4 38 28 5 42 6 50 (1) What is the total fixed cost? TC-TVC=38-28=10 (2) What are the average fixed cost and the average variable cost when 5 T-shorts are produced? TVC=TC-TFC=42 – 10 = 32 AVC=$32/5 AFC=$10/5 (3) What is the marginal cost when output increases from 5 to 6 T shirts? MC= (50-42)/(6-5) = 8...
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