Microeconomics

Anonymous
timer Asked: Nov 22nd, 2016

Question description

1) Your textbook provides an example of the margin/average relationship. It asks you to consider to your cumulative GPA and your next term GPA. Since GPA stands for grade point average, it is simply the accumulation of all your letter grades and the corresponding credit hours. For example, suppose you GPA this term is 3.0. This would be the cumulative GPA since no final grades have been assigned. That also makes this the marginal term and any grades you get this term are marginal grades that will affect your cumulative GPA. If you ace your courses this term, then your marginal (or term GPA) will be a 4.0, and will subsequently pull up your cumulative GPA. If you get Cs this term, then your marginal GPA will pull down you cumulative GPA. Hence, we see the margin leading the average.

List one example of a marginal/average relationship.

2) Fill in the table below:

Quantity

Variable Cost

Fixed Cost

Total Cost

Marginal Cost

Average Fixed Cost

Average Variable Cost

Average Total Cost

0

$

$

$200.00

---

---

---

---

1

10.00

2

20.00

220.00

3

40

4

80.00

280.00

5

160.00

6

520.00

7

640.00

840.00

3) Which firm(s) are experiencing economies of scale, diseconomies of scale, or constant returns to scale?

Firm A

Firm B

Firm C

Quantity

TC

ATC

TC

ATC

TC

ATC

1

$60.00

$60.00

$11.00

$11.00

$11.00

$11.00

2

70.00

35.00

22.00

11.00

24.00

12.00

3

80.00

26.67

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