MICROECONOMICS BU224 UNIT 6 HOMEWORK
The accompanying table shows a boat manufacturer’s total cost of producing boats. Quantity of Boats Total Cost 0 $ 450,000 1 $ 490,000 2 $ 510,000 3 $ 520,000 4 $ 540,000 5 $ 570,000 6 $ 610,000 7 $ 670,000 8 $ 750,000 9 $ 870,000 1. What is this manufacturer’s fixed cost? 2. For each level of output, calculate the variable cost (VC). For each level of output except zero output, calculate the average variable cost (AVC), average total cost (ATC), and average fixed cost (AFC). Qty of boats Total Cost Variable Costs a. Average Variable Costs b. Average Total Costs c. Average Fixed Cost d. 0 $450,000 - - - - 1 490,000 2 510,000 3 520,000 4 540,000 5 570,000 6 610,000 7 670,000 8 750,000 9 870,000 3. What is the minimum-cost output? 4. ***** *****’s dairy operates in a perfectly competitive marketplace. Joe’s machinery costs $500 per day and is the only fixed input. His variable costs are comprised of the wages paid to the few workers he employs at the dairy ...