202 ps 3 (Winter 2011)(1)

202 ps 3 (Winter 2011)(1) - NORTHWESTERN UNIVERSITY...

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NORTHWESTERN UNIVERSITY DEPARTMENT OF ECONOMICS WINTER 2011 ECONOMICS 202: INTRODUCTION TO MICROECONOMICS PROF. ZELDER PROBLEM SET 3 Due by 3:30 pm on Monday March 7: in lecture, or slid underneath Prof. Zelder’s office door PLEASE write your own name and your TA’s name on your paper (if you don’t attend a discussion section AND also don’t have a TA assigned to you, write “no TA” on your paper) Please staple your pages together Please explain your answers with a paragraph or two, including diagrams and/or equations where necessary or useful. (1) (25 points) Consider the following table, which contains information on total variable cost (TVC) for Clem’s Cookies, a perfectly competitive firm that uses labor as a variable input: x A TVC 0 0 1 4 2 7 3 12 4 20 5 32 6 48 (a) At what level of output does Clem initially experience diminishing marginal product of labor? (b) Suppose that when Clem’s output, x A , equals 6, his total revenue (TR) equals 96. If Clem operates, how much
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This note was uploaded on 10/05/2011 for the course ECON 202-1 taught by Professor Zelder during the Spring '11 term at Northwestern.

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202 ps 3 (Winter 2011)(1) - NORTHWESTERN UNIVERSITY...

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