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17. PRODUCTION IN THE SHORT RUN Complete the following table. At what point does diminishing marginal returns set in? Units of the Variable Resource Total Product 0 Marginal Product 10 1 2 a. At what level of labor input do the marginal returns from labor begin to diminish? b. What is the average variable cost when Q = 247 c. What is this firm's fixed cost? d. What is the wage rate per day? 20. RELATIONSHIP BETWEEN MARGINAL COST AND AVERAGE COST Assume that labor and capital are the only inputs used by a firm. Capital is fixed at 5 units, which cost $100 each per day. Workers can be hired for $200 each per day. Complete the fol- lowing table to show average variable cost (AVC), average total cost (ATC), and marginal cost (MC). 22 3 4 4 34 18. TOTAL COST AND MARGINAL Cost Complete the following table, assuming that each unit of labor costs $75 per day. AVC ATC MC Quantity of Labor 0 Total Output Per Day 0 100 Quantity of Labor per Day Output per Day Fixed Cost $300 Variable Cost $ 75 150 Total Cost $ 2 Marginal Cost $ 15 250 350 3 1 5 4 400 425 2 12.5 5 11 15 3 450 525 600 4 18 300 25 37.5 5 20 21. LONG-RUN Costs Suppose the firm has only three possible scales of production as shown below: a. Which scale of production is most efficient when Q = 652 b. Which scale of production is most efficient when Q = 75? c. Trace out the long-run average cost curve on the diagram. a. Graph the fixed cost, variable cost, and total cost curves for these data. b. What is the marginal product of the third unit of labor? c. What is average total cost when output is 18 units per day? 19. TOTAL COST AND MARGINAL Cost Complete the following table, where L is units of labor, Q is the rate of output, and MP is the marginal product of labor. ATC3 ATC2 ATC; MP VC ATC MC ATC TC $120 $150 1 1 1 1 1 2. 6 15 21 24 $ 0 $ 30 $ 60 $ 90 $120 $150 3 Cengage learning 2014 4 0 40 65 75 120 e 5 26