Question
Magnificent Blooms is a florist specializing in floral arrangements for weddings, graduations, and other events. Magnificent Blooms has a fixed cost associated with space and equipment of $100 per day. Each worker is paid $50 per day. The daily production function for

Question
Labor costs represent a large percentage of total costs for many firms. According to a July 29, 2011, Wall Street Journal article, U.S. labor costs were up 0.7% during the second quarter of 2011, compared to the first quarter of 2011.

Question
The accompanying table shows a car manufacturer’s total cost of producing cars.
Quantity of cars TC
0……………………………. $500,000
1……………………………. 540,000
2……………………………. 560,000
3……………………………. 570,000
4…………………………….

Question
The production function for Marty’s Frozen Yogurt is given in Problem 2. The costs are given in Problem 3.
a. For each of the given levels of output, calculate the average fixed cost (AFC), average variable cost (AVC), and average total

Question
The production function for Marty’s Frozen Yogurt is given in Problem 2. Marty pays each of his workers $80 per day. The cost of his other variable inputs is $0.50 per cup of yogurt. His fixed cost is $100 per day.

Question
Marty’s Frozen Yogurt is a small shop that sells cups of frozen yogurt in a university town. Marty owns three frozen-yogurt machines. His other inputs are refrigerators, frozen-yogurt mix, cups, sprinkle toppings, and, of course, workers. He estimates that his daily production

Question
Wolfsburg Wagon (WW) is a small automaker. The accompanying table shows WW’s long run average total cost.
Quantity of cars LRATC of car
1………………………………… $30,000
2………………………………… 20,000
3………………………………… 15,000
4………………………………… 12,000
5………………………………… 12,000
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Question
True or false? Explain your reasoning.
a. The short-run average total cost can never be less than the long-run average total cost.
b. The short-run average variable cost can never be less than the long-run average total cost.
c.

Question
Consider Don’s concrete-mixing business described in Problem 13. Assume that Don purchased 3 trucks, expecting to produce 40 orders per week.
a. Suppose that, in the short run, business declines to 20 orders per week. What is Don’s average total cost

Question
a. For each level of fixed cost, calculate Don’s total cost for producing 20, 40, and 60 orders per week.
b. If Don is producing 20 orders per week, how many trucks should he purchase and what will his average total