Suppose a firm is hiring 20 workers at a wage rate of $60. The average product of labor is 30, the last worker added 12 units of output, and total fixed cost is $3,600.
Fill in Multiple Blanks
If rounding is required, round your answer to the whole number (i.e., do not show the decimal places). Enter the numerical value only, do not enter any symbols ($, €, %, etc.).
(a) The average total cost is $ ? .
(b) The marginal cost of the last unit produced is $ ? .
For the following cost function, find minimum ATC and minimum AVC.
TC = 18,000 + Q + 0.2 Q2
Fill in Multiple Blanks
If rounding is required, round your answer to the whole number (i.e., do not show the decimal places). Enter the numerical value only, do not enter any symbols ($, €, %, etc.).
Minimum ATC = $ . 300?
Minimum AVC = $ . 61?
The following table shows the total output (units) produced with various levels of labor and each of two levels of capital:
Labor (units) 1 2 3 4
Capital = 2 units 20 50 70 80
Capital = 4 units 40 100 140 160
Fill in Multiple Blanks
If rounding is required, round your answer to the whole number (i.e., do not show the decimal places). Enter the numerical value only, do not enter any symbols ($, €, %, etc.).
When capital is fixed at 2 units,
(a) AP decreases after the (enter first, second, third, fourth) unit of labor;
(b) MP decreases after the (enter first, second, third, fourth) unit of labor;
(c) at L = 4, AP = ? units and MP = ? units;
(d) Assume the wage rate of labor is $200. As labor is increased from 1 to 2 units, AVC (enter rises, falls) from $ ? to $ ?.
Q = K1/2L1/2
w = $2, r = $2
The firm would like to know the maximum output that can be produced for $8,000. Find the combination of inputs that maximizes output for a cost of $8,000, the amount of output that can be produced, and identify the expansion path.
Fill in Multiple Blanks
(a) The expansion path is? (enter the equation of the expansion path in the form K = f(L)).
For (b), if rounding is required, round your answer to the whole number (i.e., do not show the decimal places). Enter the numerical value only, do not enter any symbols ($, €, %,etc.).
(b) The combination of inputs that maximizes output for a cost of $8,000 is: K ? = units and L = ? units, and the amount of output that can be produced is? units.