ePS2

Education researchers are often interested in how policies aect the marginal school. This is because education policies likely affect total revenues or total costs, and by mnmption the marginal sdlool runs a. balanced budget. We can express the budget as a function of student enrollment, X: TR(X) - T000. (2) In this question we will focus on the cost function, which takes the forth T000 = F0 + VC(X). (3) Fixed costs F0 are one-time, upfront costs to open the school each year (independent of en- rollment count), and variable costs VC represent costs that uctuate based on enrollment X. Q2a: Which of the following best characterizes the total cost function (3)? 1. Constant 2. Strictly increasing in X 3. Strictly decreasing in X 4. Neither strictlyr increasing or decreasing in X QZb: Researchers don't often study total revenues and total costs when comparing schools - or school districts. Instead, they focus on per-pupil spending or per-pupil revenues. If X is enrollment, per-pupil spending is average costs, or: TC X fr )= Acct). (4) Is the average cost function strictly increasing in X? Why or why not? Explain in words using a maximum of 4 sentences. I Q2c: We can specify total revenues for a school according to the funding female TR(X) = 2X'5. (5) Express the marginal revenue as a function of X. Q2d; We can specify total costs for a school as TOT-X) = 8X + 1000. (6) Which of the following best characterizes the marginal cost function associated with the total cost curve from (5)? I 1. Constant 2. Strictly increasing in X 3. Strictly decreasing in X 4. Neither strictly increasing or decreasing in X 2