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ECON 1900 Due on Moodle Tuesday March 22 at 1 1 pm. A perfectly competitive firm has two inputs, capital and labour. Capital is fixed in the short run and costs $120 per day. The firm's short run Total Product information as illustrated in the table below. The price of labour is 1. Suppose that labour is the only variable input. Average 40 .... ... . .3 i .. . ... . $20 per hour. The market price for the firms output is $2.20 per unit. It is recommended that you complete the At what quantity of output is Average Product 35 Variable Cost at its minimum' and 30 . . .. ... ;.. ..;.. . . ...... A) 8 B) 12 C) 240 Marginal Labour" "Output" "AP "TFC" TVCTCAFC AVC ATCMCMR 25 F) 420 Hrs/day Units/day D) 300 E) 320 product |. . . . . . .. . G) None of the above 20 .. . .. ... ." . 4 ...... ... ;. 38 450 15 . . . . . . .. :. . . ... ... . .. . . .. .. ... :. .. `AP 41 500 10 . ... ... . ..... of ..;..; ... . . ... 2. If the wage per unit of labour is $15, what is 45 the value of Average Variable Cost when the 5 550 firm is hiring 16 unit of labour? 0 A) $1.875 B) $0.50 4 6 8 10 12 14 16 18 20 50 C) $1.5625 600 quantity of Labour D) $0.60 E) $15 F) None of the above 56 650 6 700 Use the diagram below to answer questions 3 to 6 It illustrates the Marginal cost, MC, average total cost, ATC, and average variable cost curve, AVC for a perfectly competitive firm. Given there are 50 identical firms in 71 750 this industry, illustrate the industry short run supply curve to aid in answering the following 4 questions. Individual Firm Industry table to answer the Multiple choice questions. (answer to two decimal places) 45 ......... $ 45 8. Given the table, what is the value of Average Product at 63 hours of Labour? pex...... Yea........ (A) 0.7937 B) 7.1429 C) 11.1111 D) 0.09 E) None of the above 40 35 9. Given the table, what is the value of Marginal Product if Labour is increased from 41 to 45 hours? . . . .... 30 .. .... . A) 0.08 B) 10 D) 12.5 E) 50 F) None of the above 25 20/ .... . . .... ;.. 10. Given the table, what is the value of total cost at the quantity of output = 450 units? (A) $760 B) $880 C) $1.9536 D) $120 E) None of the above ..... ....:...... .......... 15 AVC ........ 10 S... .. ........ . ..... .. ... ......N.. 1 1. Given the table, what is the value of average fixed cost at the quantity of output = 600 units? 5 A) $0.20 B) $120 C) $2.40 D) $5.00 E) None of the above 8 9 10 0 200 400 600 800 1000 12. Given the table, what is the value of average variable cost at the quantity of output = 700 units? quantity of output Quantity of output A) $0.5556 B) $20 C $1.80 D) $1.7231 E) None of the above . .. Using the firm quantity of output of 2 units, what is the value of value of Total Fixed Cost? A) $10 B) $12.50 C) $20 D) $25 E) $35 F) $50 G) $70 13. Given the table, what is the value of average total cost at the quantity of output = 500 units? A) $22.9268 B) $1.88 C) $0.5319 D) $1.64 E) None of the above What is the equilibrium price? A) $10 B) $15 C) $20 D) $25 E) $30 F) $35 G) $40 14. Given the table, what is the value of Marginal Cost at 525 units of output (found when output is increased from 500 and 550 units)? What is the industry quantity? A) $80 B) $20 C) $1.20 D) $1.60 E) None of the above A) 400 units B) 500 units C) 600 units D) 700 units E) 800 units F) 900 units G) 1000 units 15. Given the table, what is the value of Marginal Revenue at 475 units of output? (found when output is 16. What is the individual firm quantity at this equilibrium price? increased from 450 to 500 units)? A) 2 units B) 3 units () 4 units D) 3 units E) 6 units F) 7 units G) 8 units. A) $2.20 B) $110 C) $0.22 D) $0.2444 E) $55 F) None of the above 7. Does the individual firm earn a positive profit, zero profits, or a loss? 16. Given the table, what quantity of output maximizes profits? A) positive profit B) zero profits C) a loss A) 500 B) 550 C) 600 D) 650 E) 700