1. 2. 3. I pledge that I will not use any notes, text, or other reference materials during this assignment. I pledge that I will neither give nor receive any aid from any other person during this assignment, and that the work presented here is entirely my own. Signature Date Number of workers Units of output 0 0 1 25 2 55 3 95 4 125 5 150 Table 8.2 Refer to Table 8.2, which gives a firm's production function. Assume that all non labor inputs are fixed. Diminishing returns set in with the addition of the: − A. sixth worker. B. third worker. C. fourth worker. D. fifth worker. In the short run, the marginal cost of the first unit of output is $20, the marginal cost of producing the second unit of output is $16, and the marginal cost of producing the third unit of output is $12. The firm's total variable cost of producing three units of output is: A. $12. B. $20. C. $48. D. $16. In the short run, the marginal cost of the first unit of output is $40, the average variable cost of producing three units of output is $32, and the marginal cost of producing the second unit of output is $32. What is the marginal cost of producing the third unit of output? A. $40 B. $32 C. $96 D. $24 Student:__________________________________________ I.D: _____________________ CRN: _____________________ Course: MICROECONOMICS (3 marks) (3 marks) (3 marks) Assignment 3 ----------- / 40 4. 5. Figure 8.2 presents a firm's marginal, average total, average fixed, and average variable cost curves. The firm faces fixed costs of: A. $130. B. $20. C. $4000. D. $110. Figure 8.3 shows a firm's marginal cost, average total cost, and average variable cost curves. At Q=50, the total cost is: A. $2,100. B. $2,800. C. $4,500. D. $6,300. (2 marks) (2 marks) 6. 7. 8. The explicit and implicit costs for Reliance Publishing are shown below: Cost Wages paid to employees $ ,000114 Funds spent on equipment $ ,000110 Raw materials $ ,00053 Wages foregone in another job $ ,000106 The explicit costs for Reliance Publishing are $ . (Enter your response as a whole number.) The accounting cost for Reliance is A. $ .383,000 B. $ ,000.114 C. $ .277,000 D. $ .224,000 Compute the Cost. Edward the entrepreneur takes 2 hours to cut a lawn and he cuts lawns per year. He uses solar-powered equipment (truck and mower) that will last forever and could be sold at any time for $20,000. Edward could earn $ per hour as a pedicurist. The interest rate is 10 percent. 100 — 16 a. Given his current output level, his marginal cost is $ (enter your response to the nearest dollar) and his average cost is $ (enter your response to the nearest dollar). b. Suppose he decides to reduce the number of lawns cut by half, to per year. His new marginal cost is $ (enter your response to the nearest dollar) and his new average cost is $ (enter your response to the nearest dollar ...

1. 1.
2.
3.
I pledge that I will not use any notes, text, or other reference
materials during this assignment. I pledge that I will neither
give
nor receive any aid from any other person during this
assignment, and that the work presented here is entirely my
own.
Signature Date
Number of
workers
Units of output
0 0
1 25
2 55
3 95
4 125
5 150
Table 8.2
Refer to Table 8.2, which gives a firm's production function.
Assume that all non labor inputs are fixed. Diminishing returns
set in with the addition of the:

2. −
A. sixth worker.
B. third worker.
C. fourth worker.
D. fifth worker.
In the short run, the marginal cost of the first unit of output is
$20, the marginal cost of producing the second unit of output is
$16, and the marginal cost of producing the third unit of output
is $12. The firm's total variable cost of producing three units
of output is:
A. $12.
B. $20.
C. $48.
D. $16.
In the short run, the marginal cost of the first unit of output is
$40, the average variable cost of producing three units of
output is $32, and the marginal cost of producing the second
unit of output is $32. What is the marginal cost of producing
the third unit of output?
A. $40
B. $32
C. $96
D. $24
Student:__________________________________________
I.D: _____________________
CRN: _____________________
Course: MICROECONOMICS

3. (3 marks)
(3 marks)
(3 marks)
Assignment 3
----------- / 40
4.
5.
Figure 8.2 presents a firm's marginal, average total, average
fixed, and average variable cost curves. The firm faces fixed
costs of:
A. $130.
B. $20.
C. $4000.
D. $110.
Figure 8.3 shows a firm's marginal cost, average total cost,
and average variable cost curves. At Q=50, the total cost is:
A. $2,100.
B. $2,800.
C. $4,500.
D. $6,300.
(2 marks)
(2 marks)

4. 6.
7.
8.
The explicit and implicit costs for Reliance Publishing are
shown below:
Cost
Wages paid to employees $ ,000114
Funds spent on equipment $ ,000110
Raw materials $ ,00053
Wages foregone in another job $ ,000106
The explicit costs for Reliance Publishing are $ . (Enter your
response as a whole number.)
The accounting cost for Reliance is
A. $ .383,000
B. $ ,000.114
C. $ .277,000
D. $ .224,000
Compute the Cost. Edward the entrepreneur takes 2 hours to cut
a lawn and he cuts lawns per year. He uses
solar-powered equipment (truck and mower) that will last
forever and could be sold at any time for $20,000. Edward
could earn $ per hour as a pedicurist. The interest rate is 10
percent.

5. 100
—
16
a. Given his current output level, his marginal cost is $ (enter
your response to the nearest dollar) and his
average cost is $ (enter your response to the nearest dollar).
b. Suppose he decides to reduce the number of lawns cut by
half, to per year. His new marginal cost is $
(enter your response to the nearest dollar) and his new average
cost is $ (enter your response to the
nearest dollar).
50
Constant Marginal Cost. Consider a firm operating in the
long run with an indivisible input that has a cost of $ . The
marginal cost of production is constant at $ per unit.
100
3
Use the three-point curved line drawing tool to draw and
label the firm's long-run average-cost curve for 5 to units
of output.
12
Carefully follow the instructions above, and only draw the
required objects.
The long-run average cost drops from $ for
the first unit to $ for the unit. (Enter
your responses rounded to the nearest penny.)

6. twelfth
(2 marks)
(4 marks)
(2 marks)
(2 marks)
(1 mark)
9.
10.
11.
(1) increase
decrease
(2) increase
decrease
At the current output level, a farmer's marginal cost of
producing sugar is $ . If the price of sugar is $ per pound, the
farmer should (1) production. If the price of sugar is $ per
pound, the farmer should
(2) production.
0.29 0.24

7. 0.33
(1) increased
decreased
(2) greater than
equal to
less than
More or Fewer Deliveries? Consider a delivery firm that
delivers packages by bicycle, charging $ per package and
paying each of its workers $ per hour. One day, one of the
workers was hours late to work, and the number of
packages delivered that day decreased by .
14
13 two
one package
a. The tardiness of the worker (1) the firm's profit.
b. Based on the new information provided by the tardy worker,
the firm should produce fewer deliveries by reducing its
workforce because the marginal cost is (2) the price.
(1) shut down
operate
(2) average total cost
price
(3) average variable cost
price

8. (4) exit
stay in
(5) price
average total cost
(6) average total cost
price
average variable cost
Your firm has a price of $ , an average total cost of $ , and an
average variable cost of $ . In the short run, you should
(1) because (2) exceeds (3) .
10 12 9
In the long run, you should (4) the market because (5) exceeds
(6) .
(2 marks)
(2 marks)
(6 marks)
12.
(1) above point c
at point d
(2) greater
equal to

9. (3) operating with a profit
shutting down or operating at a loss
Operate or Shut Down? Referring to the figure at right,
suppose the market price of shirts drops to $ .3.00
At this price, the marginal principle will be satisfied
(1) on the marginal-cost curve.
The price of $ is (2) than AVC, so the
firm will be better off (3) .
3.00
(2 marks) (2 marks) (2 marks)
1.
2.
3.
I pledge that I will not use any notes, text, or other reference
materials during this assignment. I pledge that I will neither
give
nor receive any aid from any other person during this
assignment, and that the work presented here is entirely my
own.
Signature Date

10. Number of
workers Units of output
0 0
1 25
2 55
3 95
4 125
5 150
Table 8.2
Refer to Table 8.2, which gives a firm's production function.
Assume that all non labor inputs are fixed. Diminishing returns
set in with the addition of the:
−
A. sixth worker.
B. third worker.
C. fourth worker.
D. fifth worker.
In the short run, the marginal cost of the first unit of output is
$20, the marginal cost of producing the second unit of output is
$16, and the marginal cost of producing the third unit of output
is $12. The firm's total variable cost of producing three units
of output is:
A. $12.
B. $20.
C. $48.
D. $16.
In the short run, the marginal cost of the first unit of output is

11. $40, the average variable cost of producing three units of
output is $32, and the marginal cost of producing the second
unit of output is $32. What is the marginal cost of producing
the third unit of output?
A. $40
B. $32
C. $96
D. $24
Student:__________________________________________
I.D: _____________________
CRN: _____________________
Course: MICROECONOMICS
(3 marks)
(3 marks)
(3 marks)
Assignment 3
----------- / 40
4.
5.
Figure 8.2 presents a firm's marginal, average total, average
fixed, and average variable cost curves. The firm faces fixed
costs of:

12. A. $130.
B. $20.
C. $4000.
D. $110.
Figure 8.3 shows a firm's marginal cost, average total cost,
and average variable cost curves. At Q=50, the total cost is:
A. $2,100.
B. $2,800.
C. $4,500.
D. $6,300.
(2 marks)
(2 marks)
6.
7.
8.
The explicit and implicit costs for Reliance Publishing are
shown below:
Cost
Wages paid to employees $ ,000114
Funds spent on equipment $ ,000110
Raw materials $ ,00053
Wages foregone in another job $ ,000106
The explicit costs for Reliance Publishing are $ . (Enter your

13. response as a whole number.)
The accounting cost for Reliance is
A. $ .383,000
B. $ ,000.114
C. $ .277,000
D. $ .224,000
Compute the Cost. Edward the entrepreneur takes 2 hours to cut
a lawn and he cuts lawns per year. He uses
solar-powered equipment (truck and mower) that will last
forever and could be sold at any time for $20,000. Edward
could earn $ per hour as a pedicurist. The interest rate is 10
percent.
100
—
16
a. Given his current output level, his marginal cost is $ (enter
your response to the nearest dollar) and his
average cost is $ (enter your response to the nearest dollar).
b. Suppose he decides to reduce the number of lawns cut by
half, to per year. His new marginal cost is $
(enter your response to the nearest dollar) and his new average
cost is $ (enter your response to the
nearest dollar).
50
Constant Marginal Cost. Consider a firm operating in the
long run with an indivisible input that has a cost of $ . The
marginal cost of production is constant at $ per unit.

14. 100
3
Use the three-point curved line drawing tool to draw and
label the firm's long-run average-cost curve for 5 to units
of output.
12
Carefully follow the instructions above, and only draw the
required objects.
The long-run average cost drops from $ for
the first unit to $ for the unit. (Enter
your responses rounded to the nearest penny.)
twelfth
(2 marks)
(4 marks)
(2 marks)
(2 marks)
(1 mark)
9.
10.
11.

15. (1) increase
decrease
(2) increase
decrease
At the current output level, a farmer's marginal cost of
producing sugar is $ . If the price of sugar is $ per pound, the
farmer should (1) production. If the price of sugar is $ per
pound, the farmer should
(2) production.
0.29 0.24
0.33
(1) increased
decreased
(2) greater than
equal to
less than
More or Fewer Deliveries? Consider a delivery firm that
delivers packages by bicycle, charging $ per package and
paying each of its workers $ per hour. One day, one of the
workers was hours late to work, and the number of
packages delivered that day decreased by .
14
13 two
one package

16. a. The tardiness of the worker (1) the firm's profit.
b. Based on the new information provided by the tardy worker,
the firm should produce fewer deliveries by reducing its
workforce because the marginal cost is (2) the price.
(1) shut down
operate
(2) average total cost
price
(3) average variable cost
price
(4) exit
stay in
(5) price
average total cost
(6) average total cost
price
average variable cost
Your firm has a price of $ , an average total cost of $ , and an
average variable cost of $ . In the short run, you should
(1) because (2) exceeds (3) .
10 12 9
In the long run, you should (4) the market because (5) exceeds
(6) .

17. (2 marks)
(2 marks)
(6 marks)
12.
(1) above point c
at point d
(2) greater
equal to
(3) operating with a profit
shutting down or operating at a loss
Operate or Shut Down? Referring to the figure at right,
suppose the market price of shirts drops to $ .3.00
At this price, the marginal principle will be satisfied
(1) on the marginal-cost curve.
The price of $ is (2) than AVC, so the
firm will be better off (3) .
3.00
(2 marks) (2 marks) (2 marks)