Econ 213 problem set 3 – liberty university

Problem Set 3

Name: ________________________________________

Problem Set 3 is due by 11:59 p.m. (ET) on Monday of Module/Week 6.

1.      Data for the market for graham crackers is shown below. Calculate the elasticity of demand between the following prices.

 Price of crackers Quantity Demanded (per month) \$3 80 \$2.5 120 \$2 160 \$1.5 200 \$1 240

\$1.00–\$1.50: ___________________________________

\$1.50–\$2.00: ___________________________________

\$2.00–\$2.50: ___________________________________

\$2.50–\$3.00: ___________________________________

Now, assume the price of graham crackers is \$2.75. Should firms raise or lower their prices if they want to increase revenue? Explain this in terms of elasticity.

2.      Assume the competitive market shown below faces a short run price of \$10. Using the graph below, identify the following:

Profit-maximizing output: _______________________

In the long run, the price falls to \$7.50. Why does this happen?

What is the new profit-maximizing output? _______________________

3.      A local hardware store is trying to decide whether to stay open. They have found that their industry is extremely competitive and profits have shrunk considerably. Knowing that you have taken an economics course, the owners have asked for your opinion. Draw 2 completely labeled graphs to help you explain the shutdown decision. One graph must be for the market as a whole, and the other must be for this store in particular. Assume that the store is losing money; however, explain why they may want to stay open for a little while longer. (Note: Your answer must include a written explanation of your graph.)

4.      Use the production function below to answer the following questions:

 Units of Labor Total Output MP 0 0 1 5 2 15 3 30 4 42 5 52 6 60 7 65 8 67 9 63 10 55

a.)    Calculate marginal productivity (MP) and put this in the table.

b.)    At what level of employment does diminishing marginal productivity begin?

c.)    At what level of employment does marginal productivity become negative?

d.)   Why does marginal product become negative?

Pages (550 words)
Approximate price: -

Why Work with Us

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

Calculate the price of your order

Total price:
\$0.00

How it works?

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.

Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.