ECON 2020 Lecture Notes - Lecture 23: Demand Curve, Deadweight Loss, Takers

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cerisegiraffe538

27 Aug 2018

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Econ2020 lecture 23 exam #3 review [chapters 13, 14, 15] ****there will be 11 questions from chapter 13 on the exam, 5 of them include a table/chart**** ****no questions involve explicit or implicit costs, not directly tested**** Diminishing marginal product: the more workers you hire, the less productivity is produced. Must know the equations for: marginal cost (mc): tc/ q, fixed cost (fc): given, variable cost (vc): given, total cost (tc): fc+vc, average variable cost (avc): vc/q, average fixed cost (afc): fc/q, average total cost: tc/q or avc+afc. Efficient scale of production: quantity of output where atc is at minimum on graph and crosses mc graphically. Some costs are fixed in the short run, all costs are variable in the long run. While the q stays the same, the price will decrease. Questions on the test come from chapter 14.

Related Questions

Given following Price and Total Cost functions:

P = 120 - 7Q

TC = 40 + 70Q - 10Q² + 0.6Q³

Where P = price, and Q is output.

Fill in the table below and answer the questions below the table.

Q	P	FC	TVC	TC	TR	Profit
0
1
2
3
4
5
6
7
8
9
10

If your company's goal is to maximize profit, answer the following questions below:

What price will you charge for your product?

What quantity will you produce?

And what would be your maximum profit or minimum loss at the price and output you chose?

2. If your company's goal is to maximize total revenue, answer the following questions below:

What price will you charge for your product?

What quantity will you produce?

And what would be your maximum total revenue at the price and output you chose? (3 points)

Question 3

Given a firm with the following cost data, fill in the table below.

Q = OUTPUT TFC = Total Fixed Cost AVC = Average Variable Cost ATC = Average Total Cost TVC = Total Variable Cost MC = Marginal Cost TC = Total Cost

Q	FC	TVC	TC	AVC	ATC	MC
0				---	---	---
1						10
2
3				10		10
4

yellowsea-lion638

. Answer the questions below given the following quantity output and cost data. Show your calculations.

Total Product (Q): 0 1 2 3 4 5 6

Total Cost (TC): $50 $80 $105 $125 $155 $195 $250

(10 points)

a. What is average variable cost of producing three units of output?

b. What is the average fixed cost of producing 2units?

c. What is the marginal cost of producing the sixth unit of output?

d. What is the average total cost of 5 units of output is:

e. Diminishing marginal returns are incurred when output is increased from___ to ______.

sapphiregoose614

Q1) Soundscape Enterprises manufactures Sonoblast, a device that produces a high-pitched reminder to telemarketers that they have once again disturbed you just when you were sitting 1â2 down to dinner. The production function for Sonoblasts is given by the formula Q = 2KL where Q is in units of output per period, K is in machine-weeks per period, and L is in labour- weeks per period. The machine rental rate r is $512 per machine-week and the wage rate w is $128 per labour-week. In the short run, K is fixed at 4 machine-weeks per period.

a. Give the formulas for the short-run production function and the marginal product of labour (MPL) function.

b. Express variable cost (VC), total cost (TC), and marginal cost (MC) as functions of L and as functions of Q; and average variable cost (AVC), average fixed cost (AFC) and average total cost (ATC) as functions of Q.

c. At what level of Q is ATC minimized? What are the values of ATC and of MC at this level of output?

d. If K is increased to a fixed 16 units, at what level of Q is ATC minimized, and what are the values of ATC and of MC at this level of output?

e. In the long run, with all inputs variable, what is the optimal K/L ration with input prices unchanged? How many units of L and of K would be required to produce the levels of output in 1c and in 1d and what is the average cost of producing Sonoblasts in each case? Explain the relation between your results here and those for 1c and 1d.

lilacchinchilla474

ECON 2020 Lecture Notes - Lecture 23: Demand Curve, Deadweight Loss, Takers

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