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6:44 < MICROECONOMICS- Chapter 7 Horn... Chapter 7 Homework (5x2 10 Points) NAME: Show your work for numerical problems. Illustrate with graphs wherever it is needed. The graphs must be neat, hand drawn and labeled properly. l. SCENARIO I : You are the owner and only employee of a company that writes computer software that is used by gamblers to collect sports data. Last year you earned a total revenue of $100,000. Your costs for equipment, rent, and supplies were $65,000. To start this business you invested an amount of your own capital that could pay you a return of $40,000 a year. Calculate the economic cost, accounting profit and economic profit. 2. Refer to Table below. If the hourly wage rate is $10 and the hourly price of capital is $20, which production technology should be selected? SHOW YOUR WORK. Technology Units of Capital Number of Workers 4 6 8 12 18 12 10 6 3. As a manager of a fast-food restaurant, you estimate that the total product of labor used to make meals varies accordin to the followin data: Number of Workers Total Product of Labor (per day) 0 2 3 4 5 PL MPL (meals per day) 0 30 75 110 125 135 Fill in the table above. 4. Illustrate total product, average product and marginal product curves and explain the relationship between marginal product and average product? 5. Using an isocost and isoquant diagram, explain how a firm chooses the least cost combination of inputs. On a separate diagram show how to derive a total cost curve from isoquants and isocost lines. Dashboard Calendar Notifications Inbox