a3even_Fall2008 - CARLETON UNIVERSITY Department of...

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 CARLETON UNIVERSITY Department of Economics ECON 1000A TUTORIAL ASSIGNMENT 3 GROUPS: 2, 4, 6, 8, 10 Instructor: D. Smith Fall 2008 1. Assume that Zinfandal grapes are bought and sold on a competitive market. Further, assume that the market is in equilibrium and that the economic profits of existing vineyards are zero. a) Draw the initial long-run equilibrium for the industry and a representative firm. b) Discuss the short-run effects of a root disease that wipes out one-third of the growers. Assume that demand remains constant. c) What are the long-run effects on the market and firms, assuming no external economies or diseconomies of scale? d) How would your answer for part c) change if sprays needed to fight the disease became more expensive? 2. Answer the following questions relating to the numbers in the table below. Number of Workers (L) Output (Q) Average Product (AP) Marginal Product (MP) 1 80 2 150 3 210 4 260 5 300
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a) Compute the average and marginal product, and fill in the table.
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This note was uploaded on 10/11/2011 for the course ECON ECON 1000 taught by Professor Michaelfrancis during the Fall '11 term at Carleton.

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a3even_Fall2008 - CARLETON UNIVERSITY Department of...

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