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Microeconomics Solution

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29) Complete the following table:

Total Variable Fixed Marginal Output Cost Cost Cost Cost 0 50 1 60 2 75 3 100 4 150 5 225 6 400

31) Complete the following table (round each answer to the nearest whole number): Total Variable Fixed Marginal Average Avg. Var. Avg. Fixed Output Cost Cost Cost Cost Cost Cost Cost 0 30 1 35 2 60 3 110 4 200 5 320 6 600

26) A firm's total cost function is given by the equation: TC = 4000 + 5Q + 10Q2. (1) Write an expression for each of the following cost concepts: a. Total Fixed Cost b. Average Fixed Cost c. Total Variable Cost d. Average Variable Cost e. Average Total Cost f. Marginal Cost (2) Determine the quantity that minimizes average total cost. Demonstrate that the predicted relationship between marginal cost and average cost holds.

21) Acme Container Corporation produces egg cartons that are sold to egg distributors. Acme has estimated this production function for its egg carton division: Q = 25L0.6K0.4, where Q = output measured in one thousand carton lots, L = labor measured in person hours, and K = capital measured in machine hours. Acme currently pays a wage of $10 per hour and considers the relevant rental price for capital to be $25 per hour. Determine the optimal capital-labor ratio that Acme should use in the egg carton division.

23) Davy Metal Company produces brass fittings. Davy's engineers estimate the production function represented below as relevant for their long-run capital-labor decisions. Q = 500L0.6K0.8, where Q = annual output measured in pounds, L = labor measured in person hours, K = capital measured in machine hours. The marginal products of labor and

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