Problems and Applications 1. The following table illustrates average fixed cost (AFC), average variable cost (AVC), and average total cost (ATC) for each quantity. The efficient scale is four houses per month, because that minimizes average total cost.
Problems and Applications 1. When the system is congested, each additional rider imposes costs on other riders. For example, when all seats are taken, some people must stand. Or if there isn't any room to stand, some people must wait for a train that isn'
ProblemsandApplications 1. a. Figure 7 illustrates the market for socks and the effects of the tax. Without a tax, the equalstotalrevenueforproducers,whichisP1xQ1,whichequalsareaB+C+D+E+F,and governmentrevenueiszero.Theimpositionofataxplacesawedgebetweent
ProblemsandApplications 1.Thispatternoftradeisconsistentwiththeprincipleofcomparativeadvantage.IftheUnited Statesexportscornandaircraft,itmusthaveacomparativeadvantageintheproductionofthese goods. Because it imports oil and clothing, the United States mus