微观经济学作业答案3

ManagerialEconomicsHOMEWORKSET#3Name:Class:Student#:(Dueday:Nextclass)Part1:1.Whentheaverageproductisdecreasing,marginalproducta.equalsaverageproduct.b.isincreasing.c.exceedsaverageproduct.d.isdecreasing.e.islessthanaverageproduct.Choose:e)Thenexttwoquestionsrefertoafirminaconstant-costindustrywithATC(q)=2,000/q+100+5qandMC(q)=100+10q.2.Thelong-runequilibriumpriceequals:a.$100b.$200c.$300d.$500e.Noneoftheaboveiscorrect.Choose:c)FindminimumATCbysettingATC=MC;thisyieldsq=20.Plugq=20intoATCtofindthelong-runequilibriumpriceof$300.3.Demandforindustryoutputhasjustincreased.Ifthemarketpriceinitiallyrisesto$600,eachfirminthelongrunwillproduce:a.20unitsb.50units.c.88.7unitd.100units.e.Moreinformationisneeded.Choose:a)Thelong-runequilibriumwillagainhaveeachfirmproducingatminimumATC.Eachfirmproduces20units,asinQuestion3.4.Astraight-lineisoquanta.isimpossible.b.wouldindicatethatthefirmcouldswitchfromoneoutputtoanothercostlessly.c.wouldindicatethatthefirmcouldnotswitchfromoneoutputtoanother.d.wouldindicatethatcapitalandlaborcannotbesubstitutedforeachotherinproduction.e.wouldindicatethatcapitalandlaborareperfectsubstitutesinproduction.Choose:e)5.AfarmerusesMunitsofmachineryandLhoursoflabortoproduceCtonsofcorn,withthefollowingproductionfunctionC=L0.5+M0.75.Thisproductionfunctionexhibitsa.decreasingreturnstoscaleforalloutputlevelsb.constantreturnstoscaleforalloutputlevelsc.increasingreturnstoscaleforalloutputlevelsd.noclearpatternofreturnstoscaleChoose:b)2L0.5+2M0.75=2C6.Thedifferencebetweentheeconomicandaccountingcostsofafirmarea.theaccountant'sfeesb.thecorporatetaxesonprofitsc.theopportunitycostsofthefactorsofproductionthatthefirmownsd.thesunkcostsincurredbythefirme.theexplicitcostsofthefirmChoose:c)7.Priceceilingareinefficientbecause:a.bothproducersandconsumerslose.b.Producerslose,consumersmaygainorlose,butalossoccursonnet.c.Producerslose,consumergain,butalossoccursonnet.d.Producersandconsumermaygainorlose,butalossoccursonnet.e.Noneoftheaboveiscorrect.Choose:b)Consumersgainfromalowerprice,butlosebecausetheyareabletobuyless.Producesclearlylosefromtheregulatedprice.Thereisalwaysawelfarelossfrompriceceilings(assumingthatthepriceceilingisbinding).8.Assumethatafirmspends$500ontwoinputs,labor(graphedonthehorizontalaxis)andcapital(graphedontheverticalaxis).Ifthewagerateis$20perhourandtherentalcostofcapitalis$25perhour,theslopeoftheisocostcurvewillbea.500.b.25/500.c.4/5.d.25/20or1/4.Choose:c)20L+25C=500,C=-4/5L+209.Supposethatthepriceoflabor()is$10andthepriceofcapital()is$20.Whatistheequationoftheisocostlinecorrespondingtoatotalcostof$100?a.PL+20PKb.100=10L+20Kc.100=30(L+K)d.10030LKPPe.noneoftheaboveChoose:b)ThenextthreequestionsrefertothealfalfamarketdescribedinFigure1.Price($/ton)FFigure110.Ifthegovernmentpurchasesenoughalfalfatoraisethepricefrom$50/tonto$75/ton,thecostoftheprogramwillbe:a.$100million.b.$225million.c.$315million.d.$675million.e.Noneoftheaboveiscorrect.Choose:d)Thegovernmentpays$75/tonforthesurplusof25–16=9milliontons:75(9)=$675.11.Ifthegovernmentraisesthepriceto$75/ton,producersurpluswillincreaseby:a.$400million.b.$500million.c.$562.5million.d.$1,875million.e.Noneoftheaboveiscorrect.Choose:c)ProducersurplusincreasebytheareaofthetrapezoidbetweenP=$50andP=$75,andQ=20andQ=25million:$25(20+25)/2=$562.5million.12.Supposethegovernmentdecidestosupportapriceof$75/tonbypayingproducersnottoproducetheexcesssupplyofalfalfa(whichis25–16=9milliontons).Theminimumcostofthisprogramwillbe:a.$157.5million.b.$202.5million.c.$315million.d.$1,875million.e.Noneoftheaboveiscorrect.Choose:b)Toidleacreage,producersmustbepaidatleasttheshadedareainFigureSD162025TonsofAlfalfa(millions)3050751:0.5(25–16)(75-30)=$202.5million.13.Producersurplusinaperfectlycompetitiveindustryisa.thedifferencebetweenprofitattheprofit-maximizingoutputandprofitattheprofit-minimizingoutput.b.thedifferencebetweenrevenueandtotalcost.c.thedifferencebetweenrevenueandvariablecost.d.thedifferencebetweenrevenueandfixedcost.e.thesamethingasrevenue.Choose:c)Part2:Afirm'stotalcostfunctionisgivenbytheequation:TC=4000+5Q+10Q2.(1)Writeanexpressionforeachofthefollowingcostconcepts:a.TotalFixedCostb.AverageFixedCostc.TotalVariableCostd.AverageVariableCoste.AverageTotalCostf.MarginalCost(2)Determinethequantitythatminimizesaveragetotalcost.Demonstratethatthepredictedrelationshipbetweenmarginalcostandaveragecostholds.Solution:PART(1)a.TFC4000b.Q4000AFCc.162025Ton(millions)DSPrice($/unit)305075TVCTCTFCTVCQQ5102d.Q105Q10Q5QQTVCAVC2e.ATCTCQ40005Q10QQ2f.MC520QPART(2)ATCisminimizedwhereMCisequaltoATC.EquatingMCtoATC40005Q10QQ520Q40005Q105Q20Q400010QQ400Q2022222ATCisminimizedat20unitsofoutput.Upto20,ATCfalls,whilebeyond20ATCrises.MCshouldbelessthanATCforanyquantitylessthan20.Forexample,letQ=10:MC=5+20(10)=2055051010101054000ATC2MCisindeedlessthanATCforquantitiessmallerthan20.MCshouldexceedATCforanyquantitygreaterthan20.Forexample,letQ=25:MC=5+20(25)=5054152525102554000ATC2MCisindeedgreaterthanATCforquantitiesgreaterthan20.Part3:TheCummin