Microeconomics
Problem Set #6
Production and Costs
1. Suppose that the price of Apples is $2. In addition, suppose that the firm's total costs are
$21 and that the firm cu
ently sells 90 Apples.
Given this information, what is this firm's total revenue?
2. The table below shows data for the production of Avocados for an individual firm operating
in a perfectly competitive market.
Quantity of Avocados Total Revenue Total Costs
0 0 30
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
Given this data, what is the per unit price of Avocados?
Use the following information to answer questions 3 through 5:
The graph below shows data for an individual firm.
3. The blue curve shows:
a. variable costs
. total costs
c. fixed costs
4. The red curve shows:
a. variable costs
. total costs
c. fixed costs
5. The black curve shows:
a. variable costs
. total costs
c. fixed costs
Use the following information to answer questions 6 through 9:
The table below shows data for Apples for an individual firm.
Quantity of Apples Fixed Costs (FC) Variable Costs (VC) Total Costs (TC)
0 ? ? 80
XXXXXXXXXX
XXXXXXXXXX
3 ? ? 485
4 80 ? 656
XXXXXXXXXX
6 80 ? 1052
7 ? XXXXXXXXXX
XXXXXXXXXX
6. Given this data, what are fixed costs when quantity is 0?
7. Given this data, what are variable costs when quantity is 0?
8. Given this data, what are variable costs when quantity is 3?
9. Given this data, what are variable costs when quantity is 4?
10. The table below shows data for Apples for an individual firm.
Quantity of Apples Fixed Costs Variable Costs
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
XXXXXXXXXX
Given this data, what are total costs when quantity is 6?
11. The graph below shows cost curves for a firm operating in a perfectly competitive market.
The green line shows?
a. Average Variable Costs (AVC)
. Average Fixed Costs (AFC)
c. Average Total Costs (ATC)
d. Marginal Costs (MC)
12. The graph below shows cost curves for a firm operating in a perfectly competitive market.
The red line shows?
a. Average Variable Costs (AVC)
. Average Fixed Costs (AFC)
c. Average Total Costs (ATC)
d. Marginal Costs (MC)
13. The graph below shows cost curves for a firm operating in a perfectly competitive market.
The blue line shows?
a. Average Variable Costs (AVC)
. Average Fixed Costs (AFC)
c. Average Total Costs (ATC)
d. Marginal Costs (MC)