 LECTURE 3 – COLLECT QUESTIONS

Question 1

Use the following chart showing the marginal profit and limited cost curves for activity A to resolve the following queries.

a. Net benefit can be maximized once _________ units of A are chosen; minor benefit can be \$_________ and marginal cost is \$_________. b. If 300 units of the are selected, net profit will increase by \$_________ in the event one _________ unit of A is used. c. If 75 units of any are selected, net advantage will increase by \$_________ if perhaps one _________ unit of the is chosen.

Question two

Fill in the blanks in the following desk. Then utilize the table to answer the concerns: X| TotalBenefit| TotalCost| MarginalBenefit| MarginalCost| NetBenefit| 0123456| _____200__________450_____500| 030_______________255_____| xx_____100__________30_____| xx__________5065_____75| 0_____230270_______________| a. If activity Times is elevated from three or four units, total benefit ___________ by \$_________. b. In the event that X is usually increased coming from 3 to 4 devices, total expense ___________ simply by \$_________. c. If By is lowered from six to 5 products, total advantage ___________ by \$_________, and total cost ___________ simply by \$_________. Thus, net gain _____________. g. The optimal standard of activity can be ___ models of activity X, and net benefit at the ideal level of Times is \$____________.

Question several

Activity A has the subsequent marginal (MB) and limited cost (MC) functions: MEGABYTES = 2, 500 20A

MC = 500 + 30A

wherever MB and MC happen to be measured in dollars.

a. The 10th device of the activity increases total benefit by \$_________ and increases total cost simply by \$_________. Since marginal advantage is _________ (greater, less) than marginal cost, adding the 10th unit of activity _________ (increases, decreases) net gain by \$_________. b. The 50th device of the activity increases total benefit simply by \$_________ and increases total cost by simply \$_________. As marginal gain is _________ (greater, less) than minor cost, subtracting the 50th unit of activity...

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