Analyze and coordinate the activities of a firm

Assignment Help Microeconomics

Reference no: EM132606157

BUS 201 Microeconomics - Emirates College of Technology

Learning Outcome 1: Describe the production possibilities frontier and relate its importance to utilizing firms' economic resources efficiently.

Learning Outcome 2: Analyze and coordinate the activities of a firm by using the theory of the firm.

Learning Outcome 3: Employ the costs, output concepts and revenue curves and their relationships in order to maximize the economic profits of firms.

Learning Outcome 4: Use the characteristics of market structures to formulate market economic activities of the firm.

Question 1: Within the context of production possibilities frontier (PPF), calculate the opportunity cost of moving from one production combination to another by using the figures in the following table.

Production Possibilities	Pizza	Hamburger
A	0	30
B	2	28
C	4	24
D	6	18
E	8	10
F	10	0

a) What is the opportunity cost of moving from B to C

b) What is the opportunity cost of moving from E to D

Question 2: If you have enough capital to start a business and you do not mind taking a risk. What type of business organization will you choose? Explain your choice.
a) Choice:

b) Explanation:

Question 3: As a market structure, monopoly has two key features that allows it to control the market. Explain these two features in detail.

Question 4: Explain the two features of non-price competition for oligopoly?

Question 5: The Lone Star Manufacturing Company has the following short-run production function. The total fixed cost of the firm is AED 1,950. The firm pays a wage rate of AED 200 per day for each worker. The firm's only variable cost is the wages of workers. Calculate the following:

a) Calculate the Average Product of Labor by filling the empty cells in the following table

Number of Workers	Total Output (Product) (per day)	Average Product of Labor APL
0	0	-
1	50
2	110
3	150
4	180
5	200

b) Calculate the following:

1) The Average Fixed Cost (AFC) when the total output is 150 units.
2) The Average Variable Cost (AVC) when the total output is 150 units.
3) The Average Total Cost (ATC) when the total output is 150 units.
4) Calculate the Marginal Cost (MC) when the total output is 180 units.

Question 6: The Eastern Company pays each worker it employs a wage of AED 400. Each unit of output is sold at a price of AED 10. Answer the following questions:
a) Fill in the empty cells in the table.

Number of workers	Total Output	Marginal Product of Labor (MPL)	Value of Marginal Product of Labor VMPL = P x MPL	Wage per Worker W	Profit Margin (PM)PM=VMPL-Wage
0	0	-	-	-	-
1	100			400
2	180			400
3	240			400
4	280			400
5	300			400

b) State the condition that the firm should meet to maximize his profit.

c) How many workers should this firm employ to maximize his profits?

Attachment:- Microeconomics.rar

Reference no: EM132606157

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