Assignment: Economics Assistance
• Production Grid, Isoquants, Short-Run Production and Costs
The following production grid shows the relationship between capital and labor inputs and the output that can be produced by a firm.
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Capital
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Labor
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0
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1
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2
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3
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4
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5
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6
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7
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8
|
|
0
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0
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1
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3
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6
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8
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10
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12
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13
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13
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1
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1
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10
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30
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60
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85
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105
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120
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130
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135
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2
|
3
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30
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85
|
105
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120
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150
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180
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210
|
230
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3
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6
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60
|
105
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130
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210
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280
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340
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380
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410
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4
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8
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85
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120
|
210
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410
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500
|
570
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620
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660
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5
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10
|
105
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150
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280
|
500
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700
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850
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950
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1000
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6
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12
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120
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180
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340
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570
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850
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1100
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1300
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1400
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7
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13
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130
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210
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380
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620
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950
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1300
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1500
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1600
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8
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13
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135
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230
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410
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660
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1000
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1400
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1600
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1700
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Based on this information use Excel Charts to do the following:
o Set up an isoquant map with isoquants representing output levels of 10, 105, and 410 units of output.
o Set up a diagram showing the firm's short run production function assuming that the firm has only one unit of capital.
o Set up a diagram showing the firm's marginal product schedule assuming that the firm has only one unit of capital.
o Assume that capital is fixed at one unit in the short run and that the costs associated with the use of fixed inputs are $30 per period, while the wage rate is $10 per unit of labor per period. Use this information to perform the calculations necessary to set up a diagram showing total cost (TC) and total variable cost (TVC) of the firm per period in the short run.
o Also, use the information in part c to then set up a another diagram showing the firm's short run marginal cost (MC), average total cost (ATC), and average variable cost (AVC) in the range from 10 to 135 units of output.
• Price Discriminating Monopoly Part I
Consider a monopolistic firm selling the same product in two completely separate markets with the following demand schedules:
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Quantity (Q1)
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0
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1
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2
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3
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4
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5
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6
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7
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8
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Price (P1)
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24
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21
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18
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15
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12
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9
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6
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3
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0
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Quantity (Q2)
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0
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1
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2
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3
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4
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5
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6
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7
|
8
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Price (P2)
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8
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7
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6
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5
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4
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3
|
2
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1
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0
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The marginal cost of this firm is equal to its average total cost and is constant at $3 per unit produced (note that this also means that there are no fixed costs). Based on this information use excel to calculate marginal revenues and set up a diagram that shows the demand and the marginal revenue curves of this firm as well as the quantities and prices it should charge in each market in order to maximize overall profits from the two markets.
• Price Discriminating Monopoly Part II
Consider a monopolistic firm selling the same product in two separate markets, A and B, which have different demand curves. The demand in market A is defined by PA = 18 - 2QA for positive prices and quantities (i.e., for all PA, QA > 0) and the demand in market B is defined by PB = 9 - QB for positive prices and quantities (i.e., for all PB, QB > 0). Assume that the marginal cost of this firm is equal to its average total cost and is constant at $4 per unit produced.
Based on this information, your task is to use excel to set up diagrams that show the demand and the marginal revenue curves of this firm, as well as the quantities and prices it charges in each market, and also calculate the firm's total profit from selling in the two markets.
Format your assignment according to the following formatting requirements:
o The answer should be typed, using Times New Roman font (size 12), double spaced, with one-inch margins on all sides.
o The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
o Also include a reference page. The Citations and references must follow APA format. The reference page is not included in the required page length.