8. Given the data below on labor and output in the short run:

L Q

1 10

2 18

3 24

Suppose that the capital is fixed at K=4. If the rent R is $4 and the wage W is $8, then the average fixed cost of producing 10 units is

Question

8. Given the data below on labor and output in the short run:

L             Q

1              10

2              18

3              24

Suppose that the capital is fixed at K=4. If the rent R is $4 and the wage W is $8, then the average fixed cost of producing 10 units is

BlackTom AI · Accepted Answer

First, identify what is meant by average fixed cost (AFC) in the short run. AFC = total fixed cost (FC) divided by the quantity produced (Q).

Step 1: Compute total fixed cost. In this problem, capital is fixed at K = 4 and the rental rate of capital (the rent) is R = $4 per unit of capital. Therefore FC = R × K = 4 × 4 = 16.

Step 2: Use the target output. The question asks for the AFC of producing 10 units, so Q = 10.

Step 3: Calculate AFC. AFC = FC / Q = 16 / 10 = 1.6.

Now evaluate the answer choices:
- option "$10": This would imply AFC = 10, which would require FC to be 100, but FC is 16, so this is incorrect.
- option "$2.4": This would correspond to FC = 24 (since 24/10 = 2.4). However, FC is only 16 given R and K, so this is incorrect.
- option "$1.6": This matches the correct AFC calculation: 16 fixed cost divided by 10 units equals 1.6.
- option "$0.80": This would imply FC = 8 (since 8/10 = 0.8) or misinterpretation of Q, which does not align with FC = 16, so this is incorrect.

In summary, only the calculation FC = R × K = 16, divided by Q = 10, yields AFC = 1.6, making option $1.6 the correct choice.

25FAL-ECO-8-48630 Quiz 7 [ DUE: SAT 10/18]

8. Given the data below on labor and output in the short run: L Q 1 10 2 18 3 24 Suppose that the capital is fixed at K=4. If the rent R is $4 and the wage W is $8, then the average fixed cost of producing 10 units is

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25FAL-ECO-8-48630 Quiz 7 [ DUE: SAT 10/18]

8. Given the data below on labor and output in the short run: L Q 1 10 2 18 3 24 Suppose that the capital is fixed at K=4. If the rent R is $4 and the wage W is $8, then the average fixed cost of producing 10 units is

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希望你的学习变得更简单

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