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Homework#5_Fall2011

# Homework#5_Fall2011 - 1 195.603 Applied Microeconomics...

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Unformatted text preview: 1 195.603 Applied Microeconomics Professor: Carey Borkoski, Ph.D. Homework #5 – Due October 3rd 1. The information below is for Bob’s blue jeans manufacturing plant. All data are per hour. Quantity FC VC TC AFC AVC ATC MC 0 \$16 \$ 0 -- -- -- -- 1 16 18 2 16 31 3 16 41 4 16 49 5 16 59 6 16 72 7 16 90 8 16 114 9 16 145 10 16 184 a. Complete the table (5 points) b. Plot the AVC, ATC and MC on a graph. (3 points) c. Explain the relationship between the ATC and MC. (2 points) 2. The following table contains information about the revenues and costs for Barry’s Baseball Manufacturing. All data are per hour. Price - \$3. Quantity TR TC Profit MR MC 0 \$0 \$1 -- -- 1 3 2 2 6 4 3 9 7 4 12 11 5 15 16 a. Complete the table. ( 4 points) b. What is Barry’s optimal level of production? What criteria did you use to determin the optimal level of production? (2 points) c. Is \$3 a long-run equilibrium price in the market of baseballs? Explain. (4 points) 2 3. Use the following graph to answer the questions below. (2 points each) Use the following graph to answer the questions below....
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Homework#5_Fall2011 - 1 195.603 Applied Microeconomics...

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