Exam 3: Optimization Techniques and New Management Tools

Use the total cost (TC) schedule that is presented in the table below to calculate average total cost, average variable cost, average fixed cost, and marginal cost when output (Q) is equal to 4. Q 0 1 2 3 4 5 6 7 8 9 TC 3 6 8 11 15 20 26 34 55 70

The form of the relationship between total, average, and marginal functions is the same whether it is applied to total revenue, product, cost, or profit.

If total cost is equal to total revenue, then profit is equal to zero.

Use the information about marginal cost (MC) and marginal revenue (MR) that is presented in the table below to determine the profit-maximizing level of output. Output 1 2 3 4 5 6 7 8 9 MC 10 11 13 16 20 25 31 38 48 MR 50 45 40 35 30 25 20 15 10

Relationships between economic variables can be expressed in the form of

If total revenue is decreasing, average revenue is negative.

The concept that corresponds most closely to the derivative is the concept of an average value.

When total revenue is at a maximum

Forming of temporary strategic alliances with other firms is called

The inflection point refers to the point where a marginal curve has a slope of zero.

Differential calculus can be applied directly to the graph of an economic relationship.

Use the following to answer questions below : -Refer to the total cost graph. What is average total cost equal to when Q = 6?

A firm should continue to increase an activity so long as the marginal revenue from the activity exceeds the marginal cost of the activity.

Use the following to answer questions below : -Refer to the total cost graph. At approximately what level of output is average total cost at a minimum?

Use the total cost (TC) schedule that is presented in the table below to determine the optimal rate of production when the firm can sell all of the output it produces at a price of $10 per unit. Also determine the level of profit (or loss) that the firm will experience at this level of output. Q 0 1 2 3 4 5 6 7 8 9 TC 5 7 8 10 14 20 28 38 50 72

Given the total cost schedule below, for which unit is the marginal cost the lowest? Output 0 1 2 3 4 5 6 Total Cost 20 30 35 36 40 48 63

A firm's demand function is Q = 40 - 2P and its total cost function is defined as TC = 100 + 2Q + 0.25Q². Use these two functions to form the firm's profit function and then determine the level of output that yields the profit maximum. What is the level of profit at the optimum level of output?

If a firm is producing a level of output where marginal profit is equal to zero, then the level of output is optimal.

Use the production relationship between total product (Q) and units of labor (L) employed that is presented in the table below to calculate the average and marginal product of labor when Q = 4. L 1 2 3 4 5 6 7 8 9 Q 2 5 11 16 20 22 23 23 22

A firm's total profit is generally at a maximum when total cost is at a minimum.