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1.The demand curve is determined to be:

1. Graph the total revenue and marginal functions.

2. Identify the elastic and inelastic regions of the demand curve.

2.Suppose that a firm’s only variable input is labor. When 50 workers are employed by the firm, the average product of labor is 50, and the marginal product of the 50th worker is 75. The wage rate is $80, and the total cost of the fixed input is $500.

a. Determine the average variable cost?

b. Determine the marginal cost?

c. Calculate the average total cost?

d. Determine the following as TRUE or FALSE.

1. Marginal cost is increasing.

2. Average cost is increasing.

3. Average total cost is decreasing.

3. Suppose you win $15 on a lotto ticket. You decide to spend all your winnings on candy bars and peanuts for a party with friends. Candy bars cost $0.75 each while bags of peanuts cost $1.50 each.

a. What is the budget line equation?

b. What is the slope of the budget line equation?

c. What is the opportunity cost of one more candy bar? What is the opportunity cost of one more bag of peanuts? How do the opportunity costs change (rise, fall, or remain constant) as additional units are purchased.

d. Suppose you had won $30 on your lotto ticket, not $15. Has the number of available combinations of candy bars and peanuts increased or decreased?