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Homework answers / question archive / A) becomes larger Table below presents the cost schedule for David's Figs
A) becomes larger Table below presents the cost schedule for David's Figs. If David produces zero fig, David's total costs are: Describe the Giffen's Effect? B) becomes smaller. Twoja odpowied? Number of Fins 1C MC AT FE 70 100 C) is unchanged. D) cannot be determined without more information 0 1 90 20 135 2 80 3 4 What is production? Describe the term.* 400 OA) $0. Twoja odpowied? B) $90. C) $100. OD) $130. Suppose you are interested in purchasing just bottles of wine and kilograms of cheese for an upcoming party. Assume you have only $45 to spend the price per bottle of wine is $5 and the price per kilogram of cheese is $10. You have estimated the utility (or satisfaction) from the consumption of wine and cheese at the party according to the following table. How many bottles of wine and kilograms of cheese should you purchase for the party (in order to maximize your satisfaction)? Table below presents the cost schedule for David's Figs. If David produces two figs, David's average variable costs are: What is perfect market? Describe the term. 10 MC 410 PC TO 470 Number of the 0 100 90 90 135 Twoja odpowied? 2 3 NO 1 100 A) $80. B) $85. Describe one example from practice of an Oligopoly and one of a Monopoly?* C) $90. Wine Cheese Quantity Total Utility Quantity Total Utility 0 0 0 0 1 100 1 130 2 175 2 250 3 225 3 350 250 4 125 260 5 465 OD) $170. Twoja odpowied? Twoja odpowied? There is some information about a firm's activity. Calculate the Netto Profit in this company. Table below presents the cost schedule for David's Figs. If David produces three figs, David's total variable costs are PC Number of Fins MC TC Ver ?? 100 Changes in the Short Run total costs result from changes in only* 20 0 1 90 20 2 135 2 3 900 9000 40 NO Posted of X Protection dry good XX Y Statis Sale Wareno Sorine Real time Raw Fary Isle Iacon Ts OA) Variable costs + 100 300 TI 3000 1000 OA) $0. O B) Fixed costs
To maximize the utility in the case of two goods, the following condition must be satisfied where the marginal utility of one good divided by its price is equal to the marginal utility of the other good divided by its price. The following table shows the same:
| Quantity (wine) | Utility | Marginal utility= Utility (t)- utility (t-1) | Quantity (cheese) | Utility | Marginal utility | MU(wine)/P(wine) | MU(cheese)/P(cheese) |
| 0 | 0 | 0 | 0 | ||||
| 1 | 100 | 100-0=100 | 1 | 130 | 130 | 100/5=20 | 130/10=13 |
| 2 | 175 | 175-100=75 | 2 | 250 | 120 | 15 | 12 |
| 3 | 225 | 50 | 3 | 350 | 100 | 10 | 10 |
| 4 | 250 | 25 | 4 | 425 | 75 | 5 | 7.5 |
| 5 | 260 | 10 | 5 | 465 | 40 | 2 | 4 |
Now, since marginal utility per unit of money for both goods are equal at 10 and hence 3 bottles of wine and 3 kilograms of cheese must be purchased.
Changes in the short run costs are only due to variable costs because the fixed costs are fixed means that they do not change with change in output but only the variable costs and hence the variable cost is the answer.
At zero level of output, the table shows the fixed costs of 100 and no other costs, and hence the total costs at zero levels of production are $100. Thus c is the correct answer.
A perfect market is a situation where there is a large number of buyers and sellers and everyone is well informed that the prices cannot be manipulated.
Oligopoly is a market where there are a few but large sellers and their prices are interdependent on each other. For example, a market for toothpaste. A monopoly is a market situation where there is only one seller. An example of a monopoly is the American tobacco company.
