1. 3. Examine the following cost shedule. You are given labour hours, wage rate, materials cost, production output, and total fixed cost. Determine the average product of labour, marginal product of labour, total variable cost, total cost, marginal cost, and profit if the price per unit is constant at $15

Answer above questions from this Table:

labour hours Wage per hour Materials Cost Output (units) AP_L MP_L FC VC TC MC Profit ($)

40 25 100 100 400

80 25 440 220 400

120 25 640 320 400

160 25 800 400 400

200 25 920 460 400

240 25 960 480 400

4.Suppose that the market for eggs is initially perfectly competitive:

a) Draw a supply and demand diagram showing the equilibrium quantity of eggs produced and the market price. Be sure to label all parts of your diagram.

b) On your diagram from Part A label the consumer and producer surplus

c) Suppose that the government permits an industry association to form which issues production quotas to each egg farmer. If the sum of the quotas issued is less than the competitive market quantity you described in part a), Draw a new Supply and Demand diagram to show the effect of the quota system on the market price and quantity of eggs.

d) On your diagram from part c) label the consumer and producer surplus. How have consumer and producer surplus changed as a result of the quota system?