What level of labour does the total output of a firm reach

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Reference no: EM133202333

Question 1. Suppose that the short-run production function of certain firm is given, Q= -0.L2+20L-15where Q is quantity of cut-flower produced, L is labour input

A. At what level of labour does the total output of a firm reach the maximum?

B. What will be the maximum achievable amount of production?

Question 2. Given the information about the costs of a firm below, workout the following questions.

Output	AFC, $	AVC, $
1	50.00	100.00
2	25.00	80.00
3	16.67	66.67
4	12.50	65.00
5	10.00	68.00
6	8.37	73.33
7	7.14	80.00
8	6.25	87.50

A. What is the firm's fixed cost?
B. If the firm produces five unites, what is the average total cost?
C. What is the total cost of producing four units?
D. If the firm close down and produces no output, what will be its total cost?
E. If the firm decides to increase its output from6-7units, by how much will its total cost increase?

Question 3. Discuss in detail about,
A. Total, average and marginal costs in the short run
B. The difference between accounting cost and economic costs
C. Relationship between marginal cost and marginal product of labor
D. Relationship between average cost and average product of labor

Question 4. Suppose that a seller decreases price for his/her good by 5 percent. Discuss howtotal revenue changes when:

A. ∈d=0.3
B. ∈d=1
C. ∈d=1.5

Question 5. Assume that good A and good B are related goods and QB=1691-400PB+6PA-6Y. Suppose that PB=0.1 Birr, PA=0.3 Birr and Y(income) =10 Birr. Then compute.
A. Price elasticity of demand for good B.
B. Income elasticity of demand for good B and explain nature of the good.
C. Cross price elasticity of demand and state the nature of the goods whether they are substitute, complementary or unrelated.

Question 6. Given the following short run production function schedule of afirmwhere we haveonly onevariable input, labor (L), and one fixed input, land.Answer the following questions

Labor (L)	0	1	2	3	4	5	6	7	8
Total Product (TP)	0	3	7	12	16	18	19	19	16

A. Identify the three stages of production in table form and graphically
B. When the law of diminishing marginal returns does starts to operate?
C. At what stage of production should a rational producer produce? Why?

Question 7. Suppose a perfectly competitive firm with total cost function given as:
TC= 400+20Q-2Q2+2/3Q3.
A. Find profit maximizing level of output and the maximum profit if theaverage revenue equals $180.
B. Calculate the shutdown level of output and price

Question 8. The following data for a hypothetical country in millions of dollars for the year 2005

Depreciation	200
Exports	150
Public transfer	200
Gross domestic private investment	300
Corporate income tax	100
Factor receipt from abroad	400
Government expenditure on goods and services	250
Interest income	800
Compensation of employees	2600
Net interest on government debit	50
Indirect business tax	100
Factor payment to abroad	200
Imports	200
Proprietors income (profits)	700
Retained corporate profit	200
Personal consumption expenditure	4500
Personal tax	100
Social security contribution	50
Rental income	600
Interest income	800

I. Calculate the gross domestic product of the country
A. Using the expenditure approach
B. Using the income approach
II. Calculate the gross national product of the country
A. Calculate the real GDP of the nation if the price index for the year is 111
B. Calculate the nations growth rate if the real GDP for the year 2004 is 4000
C. Calculate the rate the inflation rate of the economy if the consumers price index for 2004 is 100
D. Find personal disposable income

Attachment:- Economics Assignment.rar

Reference no: EM133202333

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