PS9 - Econ 301 Intermediate Microeconomics Prof. Marek...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Econ 301 Intermediate Microeconomics Prof. Marek Weretka Problem set 9 (due Thursday, April 19th, before class) Problem 1 (Cost curves) investment is F = 4 (in billions of dollars). When built, the factory will allow to produce y cars at the (variable) cost given by c ( y ) = 4 y 2 a) Does the technology used in the new factory exhibit increasing, decreasing or constant returns to scale b) Find a total costs (TC) of producing 1, 2 and 4 cars. In the graph ( y;COST ) plot a TC curve, and ( AFC ) for three levels of production y = 1 ; 2 and 4 : Plot a AFC curve in a separate graph. What happens to the AFC when production becomes very large (close to d) Find the values of the average variable cost
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

PS9 - Econ 301 Intermediate Microeconomics Prof. Marek...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online