ECO 4371 — Theory of Industrial Structure Homework #1
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ECO 4371 — Theory ofIndustrial Structure
Homework #1. Production and Costs
1. Fill in the Blanks in the following Table
|
Labor |
Total Product |
Average Product |
Marginal Product |
|
1 |
|
40 |
|
|
2 |
|
|
48 |
|
3 |
138 |
|
|
|
4 |
|
44 |
|
|
5 |
|
|
24 |
|
6 |
210 |
|
|
|
7 |
|
29 |
|
|
8 |
|
|
-27 |
2. Fill in the blanks in the following Table (Use two decimals for the non-integer numbers)
|
Output |
Total Cost (TC) |
Fixed Cost (TFC) |
Variable Cost (TVC) |
Average Variable Cost (AVC) |
Average Total Cost (ATC) |
Marginal Cost (SMC) |
|
100 |
260 |
|
60 |
|
|
|
|
200 |
|
|
|
|
|
0.30 |
|
300 |
|
|
|
0.5 |
|
|
|
400 |
|
|
|
|
1.05 |
|
|
500 |
|
|
360 |
|
|
|
|
600 |
|
|
|
|
|
3.00 |
|
700 |
|
|
|
1.60 |
|
|
|
800 |
2040 |
|
|
|
|
|
Q is output, L is the units of labor, K units of capital, LTC is long-run total cost, LAC is long-run average cost, and LMC denotes long-run marginal cost. (Write the corresponding numbers without commas)
|
Q |
L |
K |
|
LAC |
LMC |
|
10 |
|
|
|
|
|
|
20 |
|
|
|
|
|
|
30 |
|
|
|
|
|
|
40 |
|
|
|
|
|
|
50 |
|
|
|
|
|
A manufacturing firm produces a single good using a single plant. The relevant cost function is given by the following equation that relates cost (TC) and output (Q): TC = 500 + 5 Q2 . Provide the following:
4. Provide the following functions: fixed cost (TFC), variable cost (TVC), average total cost (ATC), average variable cost (AVC), and the marginal cost (SMC).
5. Using the AVC function, evaluate the partial productivity ofthe variable input.
6. Using the SMC function, evaluate the marginal returns ofthe variable input.
2022-03-22