2 Freddie Falcon Farmer Freddie Falcon is a farmer growing wheat in Nebraska

# 2 freddie falcon farmer freddie falcon is a farmer

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2. Freddie Falcon Farmer Freddie Falcon is a farmer growing wheat in Nebraska. Assuming that Freddie is buying and selling in both the input and output markets in perfect competition, answer the following questions: a. Complete Table 2 b. At what point will Freddie will be at the most efficient point of production? Why? The most efficient point of production is at an output quantity of four (4) units per day. At a production quantity of four (4) units per day the marginal cost is at its lowest therefore resulting in the greatest net revenue. c. What is the optimum point of production? How do you prove it? What are the net revenues at which profits are maximized? The optimum point of production is at a production quantity of eight (8) per day because at a production quantity of nine (9) per day, it will cost Freddie more to make the units than he will receive in profit. d. If costs of production goes up, what choices does Freddie has? At what point will Freddie should shut down ? Why (hint: use the shutdown rule for which you will have to derive the average fixed and average variable cost from the information provided).

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3. Greedy Turing The following segment from an article appeared in the news recently: “If the price of your morning Starbucks fix jumped from \$3.45 to \$142, you'd probably take your business to Dunkin' Donuts or swear off caffeine altogether.
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