Cans of Soda Total Utility Marginal Utility 10 22= 12 VOU AWN - O 32= 8 4 44= 42- Cans of Soda Total Utility Marginal Utility 0 2 a. At what point does marginal utility begins to fall? b. Will Devon consume the seventh can of soda? Explain. c. True or false? Devon will be following the utility-maximizing rule by consuming two cans of soda. Explain. 2. The following table give the marginal utility of John's consumption of three goods: A, B, and C. a. Good A costs $2 per unit, B costs $1, and C costs $3. How many units of each should a consumer with $12 buy to maximize his or her utility? SueAD b. How will the answer change if the price of B rises to $2? c. How about if the price of C is 50 cents but the other prices are as in a? From the information in the table, the marginal utility per dollar is: Number (MU/P) for (MU/P) for (MU/P) B for C W N 5 6 (Note that marginal utility should be interpreted between units of consumption)b. Graph total product (total output) monopolaiM c. Graph marginal product for workers. d. Compute average product for workers. e. Graph average product for workers 4. The table below describes the short-run production function for Sherry's company. Sherry uses labor and capital to produce can openers. a. How do you know the table represents Sherry's short-run production function? How is the short run different from the long run? b . Economists make a distinction between variable inputs and fixed inputs. For the short- run production function in the table, which input is the fixed input and which is the variable input? Explain. C . Complete the marginal product column. d . Describe the results you found in part c. What is the relationship between the quantity of labor used and the marginal product of labor at Sherry's can opener factory? Quantity of Labor Quantity of Capital Quantity of Output (can Marginal Product of (workers) (units openers) Labor 10 1 10 50 2 10 80 3 10 100 4 10 115 10 125 6 10 133 10 138 5. Complete the following using the Ch 11 part 2 tab of the Excel workbook. e. Graph Sherry's total product curve for the production of can openers, holding the level of capital constant. In your graph measure the quantity of labor on the x-axis and the quantity of can openers on the y-axis. f . Graph Sherry's marginal product of labor on a graph with the quantity of labor measured on the x-axis and the marginal product of labor measured on the y-axis. g. Sherry's curves display which of the following: a) Increasing marginal productivity b) Diminishing marginal productivity C) Diminishing absolute marginal productivity d) All of the aboveREVIEW CHAPTER 11 LEARNING OBJECTIVES 11-3 & 11-4 Watch this video on Short run cost curves 2 . Complete the table below: Total Variable Total Fixed Total Cost Average Output Cost ($) Average Cost ($) ($ ) Average Fixed Cost ($) Marginal 0 Variable Cost ($) Total Cost ($) Cost ($) 60 1 40 60 IN 76 60 3 108 60 4 140 60 5 175 60 6 216 60 7 262 60 8 312 60 369 60 10 430 60 Hints : TC = FC + VC MC = ATC/AQ AFC = FC/Q AVC = VC / Q ATC = AFC + AVC 3 . Complete on paper and in Part 3 of the Chapter 11 Lab Excel workbook a. Complete the total cost column. b . Graph the total fixed costs curve. c. Graph the total variable costs curve. d. Graph the total cost curve. e. Complete the average fixed cost column. Complete the average variable cost column. Complete the average total cost column. h. Complete the marginal cost column. i. Explain the relationship between total cost, total fixed cost and total variable cost j . Explain the relationship between average fixed cost, average variable cost, average total cost, and marginal cost ch 1 141 5 , 6 , 11 , 19 Exam 10/16