8-7 Workers Wage Total Product 0 $34 0 1 34 2 3 4 5 6 333333...

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8-7 Workers Wage Total Product 0 $34 0 1 34 2 3 4 5 6 333333 42 34 89 34 120 34 141 34 156 34 160 F F F F F F X C Marginal Cost X a. What is the relationship between marginal physical product and marginal cost? b. At what worker does the law of diminishing returns take affect? A firm has fixed costs of $60 and variable costs as indicated in the following table. Complete the table. (ea. row 3 pts.) Total Total Total fixed variable Total Average fixed product cost cost cost cost Average variable cost Average total cost Marginal cost 0 S $ 0 $ $ $ $ 1 45 2 85 3 120 4 150 5 185 6 225 7 270 8 325 9 390 10 465 a. Graph the AFC, ATC, and MC with quantity of products on the horizontal axis and costs on the vertical axis. (10 pts.) b. Why does the AFC curve slope continuously downward? (2 pts.) c. Why does the MC curve eventually slope upward? (2 pts.) d. What is the relationship between ATC at its minimum and MC? (2 pts.) 8-7 Workers Wage Total Product 0 $34 0 1 34 2 3 4 5 6 333333 42 34 89 34 120 34 141 34 156 34 160 F F F F F F X C Marginal Cost X a. What is the relationship between marginal physical product and marginal cost? b. At what worker does the law of diminishing returns take affect? A firm has fixed costs of $60 and variable costs as indicated in the following table. Complete the table. (ea. row 3 pts.) Total Total Total fixed variable Total Average fixed product cost cost cost cost Average variable cost Average total cost Marginal cost 0 S $ 0 $ $ $ $ 1 45 2 85 3 120 4 150 5 185 6 225 7 270 8 325 9 390 10 465 a. Graph the AFC, ATC, and MC with quantity of products on the horizontal axis and costs on the vertical axis. (10 pts.) b. Why does the AFC curve slope continuously downward? (2 pts.) c. Why does the MC curve eventually slope upward? (2 pts.) d. What is the relationship between ATC at its minimum and MC? (2 pts.)