In: Economics
Please answer it with explanation
A Table 1
Output (units per day) |
0 |
10 |
20 |
30 |
Total cost (dollars per day) |
$40 |
$54 |
$62 |
$80 |
For the output levels in Table 1, the minimum of the average
variable cost curve occurs at a production rate
of
A) Zero
units per
day.
B) 10
units per day.
C) 20
units per day.
D) 30
units per day.
B Refer to Table 2 below Table 2
Units of Labor |
Units of Output |
Marginal Product |
0 |
0 |
|
1 |
30 |
|
2 |
66 |
|
3 |
30 |
|
4 |
116 |
How many units of output can be produced when three units of labor are employed in Table 2?
A) 30 B) 31 C) 66 D) 96
C When technology
improves, the firm's marginal cost curve
shifts
A) Upward,
and supply
increases.
B) Downward,
and supply increases.
C) Upward,
and supply decreases.
D) Downward,
and supply decreases
D A
profit-maximizing monopolist produces the rate of output
where
A) MR
= MC and determines price based on the demand
curve.
B) Price
= MC.
C) MR
= MC and can set prices at any amount it chooses.
D) MR
= MC and determines price based on ATC
E For the perfectly
competitive firm, the marginal revenue is
always
A) Increasing.
B) Constant.
C) Equal
to average total cost.
D)
Decreasing.
A.Ans: C) 20 units per day.
Explanation:
Total cost = Fixed cost + Variable cost
Average variable cost = Total cost / Quantity
Output ( Units per day |
Total Cost | Fixed cost | Variable cost | Average Variable cost |
0 | $40 | $40 | $0 | -- |
10 | 54 | 40 | 14 | $1.4 |
20 | 62 | 40 | 22 | 1.1 |
30 | 80 | 40 | 40 | 1.33 |
B.Ans: D) 96
Explanation:
Units of Labor | Units of Output | Marginal Product |
0 | 0 | -- |
1 | 30 | 30 |
2 | 66 | 36 |
3 | 96 | 30 |
4 | 116 | 20 |
Marginal Product of labor = Change in total product / Change in number of labor
C.Ans: B) Downward, and supply increases.
Explanation:
When technology improves, then the firm's marginal cost will decrease . It leads more production . So When technology improves, the firm's marginal cost curve shifts downward, and supply increases.
D.Ans: A ) MR = MC and determines price based on the demand curve.
E.Ans: B) Constant.
Expalnation:
Under perfect competition , the industry is the price maker whereas the firm is the price taker. It means there is an unique price in the market . Firms are not able to change the market price. They can sell or produce as much as they can at the prevailing market price.
So under perfect competition , Price = Marginal Revenue = Average Revenue ( P = MR = AR)