1. Complete the following table of cost figures and then graph the information.
ID: 1190569 • Letter: 1
Question
1. Complete the following table of cost figures and then graph the information.
Output Total Total Total Average Average Marginal
Fixed Variable costs variable total cost
Cost Cost cost cost
0 0.00 3.00
1 3.00
2 4.00
3 9.20
4 2.30
5 2.38
6 5.00
7 23.90
8 36.90
2. Fill in the information in each blank below so that the equation is correct. (Note: Q is quantity of output.)
TC = TFC + ________
AFC = __________- AVC
ATC = (TVC/Q) + ____________
TFC = Q x ______________
AVC = (TC/Q) - _______/Q
TVC = (Q x ATC) – Q x _________
3. 1. Assume that the Mama Mia Pizzeria produces a single product: pizzas. Further assume that the pizza is produced using a fixed plant size, with ten ovens and varying quantities of labor. Mama Mia, the owner and manager of the Mama Mia Pizzeria, notices that as she hires additional workers, the total output of pizza goes up for a while. Then she finds that after hiring several additional workers, the workers begin to get in one another’s way and extra output begins to decline. Mama Mia knows the principles of economics and something about diminishing marginal physical product. Given the information below, calculate the marginal physical product of Mama Mia’s pizza makers. Graph total and marginal product and tell Mama Mia how many pizza makers she can employ before diminishing marginal returns set in.
Pizza Makers: 0 1 2 3 4 5 6 7 8 9 10
Output: 0 8 19 32 60 71 75 77 77 75 65
Marginal Prouct:
Explanation / Answer
2.) TC = TFC + TVC
AFC = TC - AVC
ATC = (TVC/Q) + TFC/Q
TFC = Q x Price
AVC = (TC/Q) - (AFC /Q)
TVC = (Q x ATC) – (Q x AVC)
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