ECON 201 Production Homework

A business owner makes 50 items by hand in 40 hours. She could have earned $20 an hour working for someone else. Her total explicit costs are $200. If each item she makes sells for $15, her economic profit equals:

$-250

b. What is the total cost of producing 5 tie-dyed t-shirts?

$29

At a quantity of 40 cheeseburgers per hour, the average total cost of production is ______ and the marginal cost of cheeseburger production is ______ .

1. falling 2. rising

b. What are Barney's average monthly economic profits?

1575

c. What is the marginal cost of producing the 5th tie-dyed t-shirt?

$5

At a quantity of 60 cheeseburgers per hour, the average variable cost of production is _____and the average total cost of cheeseburger production is ________.

1.rising 2.at a minimum

Barney decides to quit his job as a corporate accountant (which pays $10,000 a month) and go into business for himself as a certified public accountant. He decides not to rent office space downtown, but instead sets up shop in his converted garage apartment, which he could rent out for $300 a month if he wasn't using it as his own office. He must purchase office supplies worth $75 a month, and his monthly electricity bill has increased by $50 now that he is working out of his home office. After six months of working from home, Barney has earned an average of $12,000 per month. a. What are Barney's average monthly accounting profits?

11,875

If the firm expects to produce 500 units on average, which average total cost curve has the lowest average cost?

ATC2

Which of the following costs is an explicit cost for you?

You hire a worker who could have received the same wage working for your competitor.

The figure below shows three short-run average total cost curves for a firm. At what quantity is average total cost the lowest?

1,100 ± 50

a. At a quantity of 25 cheeseburgers per hour, the average total cost of production is ______ and the marginal cost of cheeseburger production is ______.

1. falling 2. rising

At a quantity of 35 cheeseburgers per hour, the average variable cost of production is ______ and the average total cost of cheeseburger production is ______.

1. rising 2. at a minimum

The table below shows the weekly cost of producing cowboy hats. Complete the table by filling in the missing values.

Output: 0,10,20,30,40,50 TFC: 1000 (all) TVC: 0,200,360,560,800,1100 TC: 1000,1200,1360,1800,2100 AFC:--,100,50,33.33,25,20 AVC:--,20,18.00,18.67,20,22.00 ATC:--,120.00,68.00,52,45.00,42

b. If Jamal expects that on average bands will order 900 promotional posters per concert, which silk screen machine should he order to minimize his average cost of production?

T1000 machine

c. If Jamal expects that on average bands will order 300 promotional posters per concert, which silk screen machine should he order to minimize his average cost of production?

T800 machine

Jamal silk screens promotional posters for local bands in Atlanta. Jamal can choose three different silk screen machines: the Series T800 machine, the T850 machine, or the T1000 machine. Each machine allows him to produce more posters per day. The costs of printing promotional posters using the three machines are detailed in the three tables below. a. If Jamal expects that on average bands will order 600 promotional posters per concert, which silk screen machine should he order to minimize his average cost of production?

T850 machine

The upward-sloping portion of the long-run average cost curve is a result of:

diseconomics of scale

COst of tye dyed t shirts graph

output: 0,1,2,3,4,5,6 tc: 15,18,20,21,24,29,36 mc:---,3,2,1,3,5,7