Principles of Economics 2e
2nd Edition
ISBN: 9781947172364
Author: Steven A. Greenlaw; David Shapiro
Publisher: OpenStax
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Textbook Question
Chapter 33, Problem 6SCQ
Table 33.15 shows how the average costs of production for semiconductors (the “chips” In computer memories) change as the quantity of semiconductors built at that factory increases.
- Based on these data, sketch a curve with quantity produced on the horizontal axis and average cost of production on the vertical axis. How does the curve illustrate economies of scale?
- If the
equilibrium quantity of semiconductorsdemanded is - Explain how international trade could make it possible for even a small economy to take full advantage of economies of scale, while also benefiting from competition and the variety offered by several producers.
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Consider the following two systems of production, which produce the same quantity.
A (assemble by hand) requires: 35 workers 1 robot
B (assemble by robot) requires: 5 workers 4 robots
Price of one unit of inputs (thousands): worker: £2 robot: £50
Draw the axes of a cost diagram as follows:
· units of labour on the x-axis, with a scale from 0 to 70
· units of capital on the y-axis, with a scale from 0 to 5.
Now mark system A and system B as points on this diagram. Draw an isocost line at C = £120. Comment on which system you would choose, and why.
9. Firm's Cost Schedule
Jane's Juice Bar has the following cost schedules:
In the following table, complete the marginal cost, average variable cost, and average total cost columns.
Average Total Cost
(Dollars)
Quantity
Variable Cost
Total Cost
Marginal Cost
Average Variable Cost
(Vats of juice)
(Dollars)
(Dollars)
(Dollars)
(Dollars)
30
1
35
2
15
45
3
30
60
4
50
80
5
75
105
6
105
135
Consider a production process where flowers are grown (the output) using gardeners (labor) and greenhouses (capital).
The quantity of flowers grown per day with various combinations of labor and capital are shown in the table below.
Suppose that each gardener is paid $160 per day and the greenhouse is rented for $400 per day.
Fill in total cost in the table below. (Enter your responses as integers.)
Labor
0
1
Labor
0
1
2
3
2345
5
Capital
1
1
1
1
1
Next, fill in average total cost in the table. (Enter your responses as real numbers rounded to two decimal places.)
Capital
Total Cost
Average Total Cost
$400
560
720
880
1,040
1,200
Output
0
80
Output
0
80
240
320
360
380
240
320
360
380
Total Cost
$ 400
560
720
880
1040
1200
Chapter 33 Solutions
Principles of Economics 2e
Ch. 33 - True or False: The source of comparative advantage...Ch. 33 - Brazil can produce 100 pounds of beef or 10 autos....Ch. 33 - In France it takes one worker to produce one...Ch. 33 - In Germany it takes three workers to make one...Ch. 33 - How can there be any economic gains for a country...Ch. 33 - Table 33.15 shows how the average costs of...Ch. 33 - If the removal of trade banters is so beneficial...Ch. 33 - What is absolute advantage? What is comparative...Ch. 33 - Under what conditions does comparative advantage...Ch. 33 - What factors does Paul Krugman identity that...
Ch. 33 - Is it possible to have a comparative advantage in...Ch. 33 - How does comparative advantage lead to gains from...Ch. 33 - What is intra-industry trade?Ch. 33 - What are the two main sources of economic gains...Ch. 33 - What is splitting up the value chain?Ch. 33 - Are the gains from international trade more likely...Ch. 33 - Are differences in geography behind the...Ch. 33 - Why does the United States not have an absolute...Ch. 33 - Look at Exercise 33.2. Compute the opportunity...Ch. 33 - You just overheard your friend say the following:...Ch. 33 - Look at Table 33.9. Is there a range of trades for...Ch. 33 - You just got a job in Washington, D.C. You move...Ch. 33 - Does intra-industry trade contradict the theory of...Ch. 33 - Do consumers benefit from intra-industry trade?Ch. 33 - Why might intra-industry trade seem surprising...Ch. 33 - In World Trade Organization meetings, what do you...Ch. 33 - Why might a low-income country put up barriers to...Ch. 33 - Can a nations comparative advantage change over...Ch. 33 - France and Tunisia both have Mediterranean...Ch. 33 - In Japan, one worker can make 5 tons of rubber or...Ch. 33 - Review the numbers for Canada and Venezuela from...Ch. 33 - In Exercise 33.31, is there an ask where...Ch. 33 - From earlier chapters you will recall that...Ch. 33 - Consider two countries: South Korea and Taiwan....Ch. 33 - If trade increases world GDP by 1 per year, what...
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