Exam 22:Cost Curves-Part A

The VCR manufacturing business is perfectly competitive.Suppose that currently,firms that manufacture VCRs utilize either technology 1 or technology 2,whose cost functions are TC1(Q)=1,120-60Q + Q2 TC2(Q)= 300 - 20Q + Q2 In the long run,assuming no new manufacturing technologies,what will happen in this industry?

A competitive firm has the short-run cost function c(y)= 2y3 -16y2+ 64y+ 50.The firm will produce a positive amount in the short run if and only if the price is greater than

Mary Magnolia from your workbook has variable costs equal to y²/F,where y is the number of bouquets she sells per month and where F is the number of square feet of space in her shop.If Mary has signed a lease for a shop with 200 square feet,if she is not able to get out of the lease or to expand her store in the short run,and if the price of a bouquet is $6 per unit,how many bouquets per month should she sell in the short run?

In the reclining chair industry (which is perfectly competitive),two different technologies of production exist.These technologies exhibit the following total cost functions: C1(Q)= 1,000 + 600Q - 40Q2 + Q3 C2(Q)=200 + 145Q- 10Q2+Q3 Due to foreign competition,the market price of reclining chairs has fallen to $190.In the short run,firms using technology 1

Hildegard,an intelligent and charming Holstein cow,grazes in a very large,mostly barren pasture with a few patches of lush grass.When she finds a new grassy area,the amount of grass she gets from it is equal to the square root of the number of hours,h,that she spends grazing there.Finding a new patch of grass on which to graze takes her 1 hour.Since Hildegard does not have pockets,the currency in which her costs are measured is time. a.What is the total cost to Hildegard of finding a new plot of grass and getting y units of grass from it? b.Find an expression for her marginal costs and her average cost per patch of grass as a function of the amount of grass she gets from each patch. c.How much time would she spend in each plot if she wanted to maximize her food intake? (Hint: Minimize average costs per unit of grass eaten. )

Rex Carr could pay $10 for a shovel that lasts one year and pay $5 a car to his brother Scoop to bury the cars,or he could buy a low-quality car smasher that costs $200 a year to own and that smashes cars at a marginal cost of $1 per car.If it were also possible for Rex to buy a high-quality hydraulic car smasher that cost $650 per year to own and if with this smasher he could dispose of cars at a cost of $.67 per car,it would be worthwhile for him to buy this high-quality smasher if he needed to dispose of

A competitive firm has the short-run cost function c(y)= 2y3 -16y2+ 128y+ 10.The firm will produce a positive amount in the short run if and only if the price is greater than

The VCR manufacturing business is perfectly competitive.Suppose that currently,firms that manufacture VCRs utilize either technology 1 or technology 2,whose cost functions are TC1(Q)= 340 - 20Q + Q2 TC2(Q)= 405 - 30Q + Q2 In the long run,assuming no new manufacturing technologies,what will happen in this industry?

The production function of a competitive firm is described by the equation y =4x^1/2 1x^1/2 2.The factor prices are p1 = $1 and p2 = $36 and the firm can hire as much of either factor it wants at these prices.The firm's marginal cost is

A firm's production function is given by q =min{M,L^1/2},where M is the number of machines and L is the amount of labor that it uses.The price of labor is $1and the price of machines is $2 per unit.The firm's long-run marginal cost curve is

The marginal cost curve of a firm is MC = 8y.Total variable costs to produce 11 units of output are

Florence's Restaurant estimates that its total costs of providing Q meals per month is given by TC= 8,000 +5Q.If Florence charges $9 per meal,what is its break even level of output?

The average variable cost curve must always be U-shaped.

A competitive firm has the short-run cost function c(y)= y3 -2y2 + 5y+ 6.Write down equations for: a.The firm's average variable cost function b.The firm's marginal cost function c.At what level of output is average variable cost minimized? d.Graph the short-run supply function for this firm,being careful to label the key points on the graph with the numbers specifying the exact prices and quantities at these points.

Touchie McFeelie from your workbook has a production function (0.1)J^1/2 J^3/4,where J is the number of old jokes used and L is the number of hours of cartoonists' labor.Touchie is stuck with 400 old jokes for which he paid 4 dollars each.If the hourly wage rate for cartoonists is 5 dollars,then the total cost of producing 16 comics books is

The area under the marginal cost curve measures total fixed costs.

Rex Carr could pay $10 for a shovel that lasts one year and pay $5 a car to his brother Scoop to bury the cars,or he could buy a low-quality car smasher that costs $200 a year to own and that smashes cars at a marginal cost of $1 per car.If it were also possible for Rex to buy a high-quality hydraulic car smasher that cost $550 per year to own and if with this smasher he could dispose of cars at a cost of $.67 per car,it would be worthwhile for him to buy this high-quality smasher if he needed to dispose of

The production function of a competitive firm is described by the equation y= 8x^1/2 1x^1/2 2.The factor prices are p1 = $1 and p2 = $4 and the firm can hire as much of either factor it wants at these prices.The firm's marginal cost is

If Green Acres Turf Farm's total cost of producing acres of sod is TC=4Q2 + 25Q + 30,the marginal cost of producing the 20th acre of sod is

A firm has the short-run total cost function c(y)= 4y2+ 100.At what quantity of output is short-run average cost minimized?