Economics homework… inputs and costs

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The accompanying table shows a boat manufacturer’s total cost of producing boats.

 

Quantity of Boats

Total Cost

0

 $        450,000

1

 $        490,000

2

 $        510,000

3

 $        520,000

4

 $        540,000

5

 $        570,000

6

 $        610,000

7

 $        670,000

8

 $        750,000

9

 $        870,000

 

1.    What is this manufacturer’s fixed cost?

 

 

2.    For each level of output, calculate the variable cost (VC). For each level of output except zero output, calculate the average variable cost (AVC), average total cost (ATC), and average fixed cost (AFC)

 

Qty of boats

Total Cost

Variable Costs

(a.)

Average Variable Costs

(b.)

Average Total Costs

(c.)

Average Fixed Cost

(d.)

0

$450,000

–

–

–

–

1

490,000

 

 

 

 

2

510,000

 

 

 

 

3

520,000

 

 

 

 

4

540,000

 

 

 

 

5

570,000

 

 

 

 

6

610,000

 

 

 

 

7

670,000

 

 

 

 

8

750,000

 

 

 

 

9

870,000

 

 

 

 

 

 

3.    What is the minimum-cost output?

 

 

4.    For each level of output, calculate this manufacturer’s marginal cost (MC)

 

(For convenience, place the Marginal Cost between 0 and 1 boat on the second row, the Marginal Cost between 1 and 2 boats on the third row, and so on)

 

Qty of boats

TC

Marginal Costs

0

$450,000

–

1

490,000

 

2

510,000

 

3

520,000

 

4

540,000

 

5

570,000

 

6

610,000

 

7

670,000

 

8

750,000

 

9

870,000

 

 

———————

References:

 

Microeconomics: Unit 6 Assignment: Production and Costs

Content (14 points)

Points Possible

Points Earned

Find the manufacturer’s fixed cost.

2

 

Complete the chart for quantities from 1 to 9 to include:

·         Variable costs

·         Average Variable costs

·         Average Total Costs

·         Average Fixed costs.

8

 

Calculate the minimum cost output

2

 

Calculate the manufacturer’s marginal cost for each level of output.

2

 

Analysis (6 points)

 

 

Work demonstrates synthesis of concepts, research, and experience.

3

 

Analysis exceeds basic comprehension to demonstrate higher-order thinking.

3

 

Writing (5 points)

 

 

Correct use of APA 6th edition format, all sources used to support the paper are referenced.

2

 

Sentences are clear, concise, and direct; tone is appropriate, spelling, grammar, and punctuation are correct.

3

 

Total

25

 

 

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