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.
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(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
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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
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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 $8,000, the amount of output that can be produced, and identify the expansion path.
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(a) The expansion path is ? (enter the equation of the expansion path in the form K = f(L)).
For (b), if rounding is required, round your answer to the whole number (i.e., do not show the decimal places). Enter the numerical value only, do not enter any symbols ($, €, %,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.