Econ2023

3/25/13

Chap. 23

23-1. The short run is a time period during which the professor cannot enter the job market and find employment elsewhere. This is the nine-month period from August 15 through May 15. The professor can find employment elsewhere after the contract has been fulfilled so the short run is nine months and the long run is greater than nine months.

23-3. input labor 0,1,2,3,4,5,6 total output of flash 0,25,60,85,105,115,120 marginal physical product -,25,35,25,20,10,5

23-5. Total variable costs are equal to total costs, $5 million less total fixed costs, $2 million which equals $3 million. Average variable costs are equal to total variable costs divided by the number of units produced. Average variable costs equal $3 million divided by 10,000 or $300.

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a. TFC equals AFC $10 per LCD screen, times the quality produced per day, 100 LCD screens, which equals $1,000 per day. b. The TVC of producing 100 LCD screens equals AVC, $10 per unit, times the quantity produced per day, 100 LCD screens, which equals $1,000 per day. c. The total costs of producing 100 LCD screens equal total fixed costs plus the total variable costs of producing 100 CD screens or $1,000 per day plus $1,000 per day, which equals to $2,000 per day. d. The ATC of producing 99 LCD screens equal the average fixed costs of $10.10 plus the average variable costs of $10.07, or $20.17 per LCD screen. The total cost of producing 99 nLCD screens equals $20.17 times 99 or $1,996.83. The marginal cost of producing the hundredth LCD screen equals the change in total costs from increasing production from 99 to 100, or $2,000 - $1,996.83 or $3.17 per LCD screen.

23-9. a. ATC are $20 per unit plus $30 per unit or $50 per unit and total costs divided by average total costs equal output, which therefore is $2,500/$50 per unit or 50 units. b. TVC = AVC x Q = $20 per unit x 50 units = $1,000. c. TFC = AFC x Q = $30 per unit x 50 units =