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Non-tutorial assignment the costs of production

Non-tutorial assignment the costs of production - (c If the...

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James E. Pesando Economics 100 Non-Tutorial Assignment: The Costs of Production 1. The owner of a barber shop calculates that the relationship between the number of barbers and the number of haircuts each day is as follows: No. of Barbers No. of Haircuts 0 0 1 10 2 25 3 45 4 60 5 70 Each barber is paid $50 per day. The total fixed costs of operating the barber shop are $300 per day. (a) If the number of barbers increases from 2 to 3, what is the marginal product of labour? If the number of barbers increases from 3 to 4? From 4 to 5? (b) What is the marginal cost of a haircut if the number of barbers increases from 2 to 3? From 3 to 4? From 4 to 5?
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Unformatted text preview: (c) If the number of barbers is 4, what is: The average total cost of producing a haircut? The average variable cost of producing a haircut? The average fixed cost of a haircut? (d) Suppose that total fixed costs rise from $300 per day to $600 per day, as a new lease must be negotiated at a sharply higher rent. How would this affect your answer to part (b)? to part (c)? (d) Assuming that fixed costs are $600 per day (and that barbers are paid $50 per day), graph: (1) the marginal product schedule (2) the marginal cost schedule (3) the average total cost schedule (4) the average fixed cost schedule...
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