Assignment
A. Suppose you are the owner of a soft drink bottle manufacturing firm. You just opened your business and it turned out that the cost of producing the first bottle was substantial because you have to purchase machines & raw materials, hire people, and rent a building. But as you produce more, you discovered that the total cost per one bottle gradually decreases.
- What concept is being explained (from chapter 11) in the given example? Answer this using at least 150 words.
- In the new testament(bible), the concept of cost (sacrifice) and revenue (rewards) are embodied here and there. Read Mark 8 in the Bible, and discuss briefly describe how it relates to the economic concept of cost and/or revenue
B. Complete the following table describing the short-run daily costs of the Kangaroo Backpack Company.
|
Total Product (Backpacks)
|
Total Fixed Cost
|
Total Variable Cost
|
Total Cost
|
Average Fixed Cost
|
Average Variable Cost
|
Average Total Cost
|
Marginal Cost
|
|
0
|
|
0
|
|
--
|
--
|
--
|
--
|
|
1
|
|
30
|
|
|
|
|
|
|
2
|
|
50
|
|
|
|
|
|
|
3
|
|
60
|
|
|
|
|
|
|
4
|
|
64
|
159
|
|
|
|
|
|
5
|
|
90
|
|
|
|
|
|
|
6
|
|
150
|
|
|
|
|
|
|
7
|
|
196
|
|
|
|
|
|
|
8
|
|
240
|
|
|
|
|
|