ECON 211 - Macroeconomic Policy

Running head: ECONOMICS ASSIGNMENT
Economics Assignment
Name of the Student
Name of the University
Course ID

ECONOMICS ASSIGNMENT1
Table of Contents
Chapter 10 Output and Costs...........................................................................................................2
Answer 1......................................................................................................................................2
Chapter 11 Perfect Competition......................................................................................................4
Answer 2......................................................................................................................................4
Answer 3......................................................................................................................................5
Chapter 12 and 13 Monopoly and Monopolistic Competition........................................................6
Answer 4......................................................................................................................................7
Chapter 14: Oligopoly.....................................................................................................................8
Answer 5......................................................................................................................................8
Reference list.................................................................................................................................10

ECONOMICS ASSIGNMENT2
Chapter 10 Output and Costs
Answer 1
1)
Labor Output TVC TFC TC ATC AFC AVC MC
1 30 500 1000 1500 50.00 33.33 16.67
2 70 1000 1000 2000 28.57 14.29 14.29 12.50
3 120 1500 1000 2500 20.83 8.33 12.50 10.00
4 160 2000 1000 3000 18.75 6.25 12.50 12.50
5 190 2500 1000 3500 18.42 5.26 13.16 16.67
6 210 3000 1000 4000 19.05 4.76 14.29 25.00
7 220 3500 1000 4500 20.45 4.55 15.91 50.00
0 50 100 150 200 250
0.00
10.00
20.00
30.00
40.00
50.00
60.00
ATC, AFC, AVC and MC
ATC AFC AVC MC
Output
Cost
2)

ECONOMICS ASSIGNMENT3
0 50 100 150 200 250
0.00
10.00
20.00
30.00
40.00
50.00
60.00
AP, MP, AVC and MC
AP MP AVC MC
Output
Cost, average and marginal product
The figure above depicts the connection between average variable cost (AVC), Marginal cost
(MC), average product (AP) and Marginal product (MP). At the initial phase of production both
average and marginal product increases. In this phase, the MP curve is above the AP curve
implying marginal product is larger than average product. At the maximum point of average
product, it is equal to the marginal product. Average product is maximum at the output level of
160. MP maximizes before the maximum point of average product. Beyond the output level of
160, both average and marginal product falls. At this stage MP is below the AP implying
marginal product is falling faster than average product (1). A similar kind of relationship is also
observed between average variable cost and marginal cost. When AVC is falling then MC is
below the AVC. That is at the initial stage of production, marginal cost is falling faster than
average variable cost. Marginal cost passes through the minimum point of average variable cost.
Beyond the minimum of AVC, AVC starts to increase. Then MC is above the AVC indicating
marginal cost is rising faster than average variable cost.