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A) The SRATC curve is drawn for a given plant size. Given this plant size, what is the level of output
that minimizes short-run average cost? Q 1
What are the unit cost for the short run at this level of output? C1
B) What is the level
Unit 4 study exercises
A) Profit-maximizing price and output for the monopolist on Eagle Island?
MR hits MC at $20 per round of golf and 400 hundred quantity rounds of golf per week.
Maximizing price and output is 20.
B) Average tota
#5 Consider the following table showing the various revenue concepts for DairyTreat Inc., a perfectly
competitive firm that sells milk by the litre. Suppose the firm faces a constant market price of $2 per
5. For each of the following statements determine whether there has been a change in supply or a
change in quantity supplied. Draw diagram to show either shift in supply curve or movement along
a. movement along supply curve
5. Wacky Wintersports Inc. can produce snowboards according to the following schedule.
A) Complete the table by calculating the marginal and average products.
Specialization, Comparative Advantage and Opportunity Cost
Example 1: Bud and Larry have been shipwrecked on a deserted island.
Their economic activity consists of either gathering berries or fishing.
We know that Bud can catch four fish in one hour or ha
Exhibit 1: Production Possibilities Curve
In the Exhibit, if the economy moves from point L to point M, the opportunity cost of producing
10 more capital goods is:
Answer: 15 less consumer goods.
In the Exhibit, if the economy prod
3. Consider an economy that produces only food and clothing.
a) Point A: Clothing-2.5 tonnes
Food- 3 tonnes
Point B: Clothing 2.5 tonnes
Food- 7 Tonnes
Point C: Clothing- 6.5 tonnes
Food- 3 Tonnes
b) Point A: the economy uses more food tha