Economics 210

Homework - Chapter 5- Extra Credit - 10 points

(1) Complete Table 1 and answer the questions below.

Table 1

Rate of Output Total Cost Marginal Cost Average Total Cost

0 $100 _________ __________

1 $110 _________ __________

2 $130 _________ __________

3 $165 _________ __________

4 $220 _________ __________

5 $300 _________ __________

(a) What is the value of fixed costs Table 1? _______

(b) At what rate(s) of output does Average Total Cost reach a minimum? ______

(c) At what rate(s) of output does the minimum of Average Total Cost equal Marginal Cost? _______

(2) Complete Table 2 and answer the question below.

Table 2

Rate of Output Labor Input Marginal Physical Product of Labor

0 0 0

20 1 ___

46 2 ___

64 3 ___

72 4 ___

78 5 ___

81 6 ___

82 7 ___

80 8 ___

After what Rate of Output does the law of diminishing returns first become apparent?

_______

(3) Do Problem Question #5 in the textbook at the end of Chapter 5.