CHAPTER 6 PRODUCTION EXERCISES 4. A political campaign manager must decide whether to emphasize television advertisements or letters to potential voters in a reelection campaign. Describe the production function for campaign votes. How might information about this function (such as the shape of the isoquants) help the campaign manager to plan strategy? The output of concern to the campaign manager is the number of votes. The production function has two inputs‚ television advertising and
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run vs the long run what are the differences -p252 onwards TP‚ AP MP curves Short run cost concepts—TC‚ VC. MC Why are cost curves u shaped Whats shifts the cost ciurves Long Run costs—p262 The LRAC curve –p264 Economies‚ diseconomies and cosntant returns to scale in LR-p264 Ch 12: Perfect Competition Why is demand curve facing a perfect completion firm perfectly elastic –p275 Firms production decisions in perfect competition- p276; proifit maximizing output -p277 When will firm shut
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Exhibit 1 1. (Exhibit 1: Total Product) Between points A and B the marginal product of labor is: A) increasing. B) zero. C) falling. D) infinite. Ans: C Exhibit 2: Total Product and Marginal Product | Labor per Day | Total Products (units per period) | 0 | 0.0 | 1 | 1.0 | 2 | 3.0 | 3 | 7.0 | 4 | 9.0 | 5 | 10.0 | 6 | 10.7 | 7 | 11.0 | 8 | 10.5 | 2. (Exhibit 2: Total Product and Marginal Product) The marginal product of the second worker is: A) 1
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FUNDAMENTALS OF ECONOMICS 11th December 2011 EXAMINATION PAPER Section A Section B Answer ALL questions in SECTION A. Answer TWO questions in SECTION B. Clearly cross out surplus answers. Time Allowed: 2.5 Hours Candidates are allowed to bring in a scientific calculator for this module. Graph paper will be provided by the Centre. © NCC Education Ltd 2011 SECTION A ANSWER ALL QUESTIONS Question 1 a) Explain what is meant by the opportunity cost of producing a good. (2 marks) b)
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600 30 50 80 50 25 600 1675 1‚900 24 52 76 60 30 600 2125 2‚275 20 55.83 71.83 130 40 600 2775 3‚375 17.10 60.71 77.86 90 45 600 3625 4‚225 15 69.38 84.38 130 50 600 4725 5‚325 12 94.50 106.50 220 Identify the efficient scale of firm. Explain your reasoning. Efficient scale of firm is 30. As this is the minimum output at the minimized average total cost of production. As this is the output where the average total cost is minimum and is the minimum output at that average cost. Part II. Consider
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variable over other ranges AC(Q): average cost function; describes how the firms average cost function or per unit of output costs vary with the amount of output it produces. When average costs decreases as output increases‚ there are economies of scale Margincal cost: refers to the rate of change of total cost with respect to output the incremental cost of producing exactly one more unit of output. Margincal cost often depeds on the total volume of output. Short-run average costs: the period
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will be realized by economies of scale. Both target and acquirer firm move closer to optimum quantity‚ the merger will produce cost synergies. b) (i) Average cost curve as plotted in excel. (ii) For optimal quantity‚ differentiate the trend-line equation and equate it to 0. 2*0.0492x-0.3049 = 0 x = 3.098577 (iii) Optimal quantity is less than combined quantity of 5 units; hence merger will lead to diseconomies of scale and no cost synergies would be
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What is the difference between the concepts of diseconomies of scale‚ and the law of diminishing return? (4 marks) Diseconomies of scale take place along the long-run average cost rises as the quantity of output increases. The law of diminishing returns implies that adding more of one factor of production at some point will decrease returns per unit. The difference between these two concepts is the number of input does not change in diseconomies per unit of output and in the law of diminishing
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Programme: Diploma in Business Management Studies Unit Number and Title: 600/1068/X; Economics for Business Module Tutor: Moslahur Reza/Murshed Thakur Submission Date September 21‚ 2012 Introduction IN THIS ASSIGNMENT I HAVE WORKED ON MICROENOMICS AND MACROENOCMICS THE LEARNER WITH AN UNDERSTANDING OF WHAT IS MEANT BY MICROECONOMICS AND MACROECONOMICS‚ THE
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firm or leisure industry can be considered to be efficient. First of all they may be productively efficient. This is where they would be operating at their lowest average cost‚ meaning they are benefiting from all economies of scales and experience no diseconomies of scale. They particularly must avoid any waste of factors of production. Allocative efficiency exists when the firm is operating where Price is equal to Marginal Cost. When a firm or industry is allocatively efficient this means they
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