Updated Chapter

4. Problems and Applications Q4

Workers	Output	Marginal product	Total cost	Marginal cost	Average Total cost
0	0	0	180
1	30	30	300	4	10
2	70	40	420	3	6
3	120	50	540	2.4	4.5
4	165	45	660	2.666667	4
5	200	35	780	3.428571	3.9
6	220	20	900	6	4.090909
7	230	10	1020	12	4.434783

True Statement

· When marginal product s rising, marginal cost is falling.

· When marginal total cost is greater than average total cost, the average total cost is rising.

· Average total curve is U shaped.

6. Problems and Applications Q6

Pizzeria's fixed cost is $280

Quantity	Total cost	Marginal cost using total cost	variable cost	marginal cost using variable cost
0	280	0	0	0
1	320	40	40	40
2	350	30	70	30
3	380	30	100	30
4	420	40	140	40
5	470	50	190	50
6	530	60	250	60

It does not matter: True

8. Problems and Applications Q8

Lump-sum true statements:

· Average total cost will increase.

· Marginal cost will remain unchanged

Per-burger true statements:

· Marginal cost will increase

· Average variable cost will increase

9. Problems and Applications Q9

Quantity	Variable	Total	Marginal	Average variable cost	Average total cost
	Cost	Cost	Cost
0	0	30	-	-	-
1	5	35	5	5	35
2	15	45	10	7.5	22.5
3	30	60	15	10	20
4	50	80	20	12.5	20
5	75	105	25	15	21
6	105	135	30	17.5	22.5

Graph

True Statement

The marginal cost curve is above the average total cost curve when the output is greater than four and average total cost is rising.

Marginal Cost -

[SERIES NAME] 5 10 15 20 25 30 Average variable cost - [SERIES NAME] 5 7.5 10 12.5 15 17.5 Average total cost - [SERIES NAME] 35 22.5 20 20 21 22.5 Quantity of juice (VATS) Cost