202 Problem Set 3 marking guide (Winter 2011)
(1) 25 points total
(a) 10 points total
•
2 points: understanding that MC = w/MP
L
•
2 more points: inferring that diminishing MP
L
begins at the point where MC begins to
increase
•
2 more points: appreciating that MC = ∆TVC/∆x
A
•
2 more points: calculating specific values for MC (4, 3, 5, 8, 12, 16) from table
•
2 more points: identifying x
A
= 3 (where MC = 5) as initial point of diminishing MP
L
(b) 10 points total
•
2 points: defining TR = P
x
x
A
•
2 more points: inferring that P
x
= 96/6 = 16
•
2 more points: knowing that profits are maximized where MR = MC
•
2 more points: understanding (implicitly or explicitly) that P
x
= MR for perfectly competitive
firm
•
2 more points: determining that MR = MC when x
A
= 6
(c) 5 points total
•
2 points: knowing that firm operates if TR > TVC at (best) point of operation
•
1 more point: seeing that TR = 96 > TVC = 48 in this case
•
2 more points: deducing that firm does operate, given these facts
(2) 25 points total
(a) 6 points total
•
2 points: knowing that TFC is TC at the point where x
A
= 0
•
2 more points: knowing that TC = AC* x
A
, yielding
•
2 more points: interpreting 100 to be level of TFC, since it is value of TC when x
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 '11
 ZELDER
 Microeconomics, Supply And Demand

Click to edit the document details