1. Fill in the blanks based upon the information provided below no diagram with curves is needed. Inputs: capital(fixed) and labor (variable) Assume: price of capital= $10 per unit, price of labor= $5 per unit K L Output APL MPL FC VC TC MC AFC AVC ATC 10 24 35 48 56 67 63 58 1 1 1 2 1 1 1 3 4 5 6 7 00 au 1 La coloso 1 1 3. Consider Don's concrete-mixing business described in Problem 3. Assume that Don purchase three trucks, expecting to produce 40 orders per week. a. Suppose that, in the short run, business declines to 20 orders per week. What is Don's average total cost per order in the short run? What will his average total cost per order in the short run be if his business booms to 6o orders per week? b. What is Don's long-run average total cost for 20 orders per week? Explain why his short-run average total cost of producing 2 orders per week when the number of trucks is fixed at 3 is greater than his long-run average total cost of producing 20 orders per week. 3. From the table below, calculate in excel TC, VC, FC, AVC, AFC, ATC, MC, total revenue and total profits with its corresponding curves. Q TFC TVC TC AFC AVC AC MC Total Total Revenue Profits o - To 120 0 60 80 90 105 140 210 a) At what level of output are profits maximized? b) At what level of output is revenue maximized? c) At what level of output, the average variable cost reaches its lowest? d) Does the average variable cost intersect the marginal cost at some level of output? 1. Fill in the blanks based upon the information provided below no diagram with curves is needed. Inputs: capital(fixed) and labor (variable) Assume: price of capital= $10 per unit, price of labor= $5 per unit K L Output APL MPL FC VC TC MC AFC AVC ATC 10 24 35 48 56 67 63 58 1 1 1 2 1 1 1 3 4 5 6 7 00 au 1 La coloso 1 1 3. Consider Don's concrete-mixing business described in Problem 3. Assume that Don purchase three trucks, expecting to produce 40 orders per week. a. Suppose that, in the short run, business declines to 20 orders per week. What is Don's average total cost per order in the short run? What will his average total cost per order in the short run be if his business booms to 6o orders per week? b. What is Don's long-run average total cost for 20 orders per week? Explain why his short-run average total cost of producing 2 orders per week when the number of trucks is fixed at 3 is greater than his long-run average total cost of producing 20 orders per week. 3. From the table below, calculate in excel TC, VC, FC, AVC, AFC, ATC, MC, total revenue and total profits with its corresponding curves. Q TFC TVC TC AFC AVC AC MC Total Total Revenue Profits o - To 120 0 60 80 90 105 140 210 a) At what level of output are profits maximized? b) At what level of output is revenue maximized? c) At what level of output, the average variable cost reaches its lowest? d) Does the average variable cost intersect the marginal cost at some level of output
