Questions: The table shows the total product schedule of a firm that uses 1 sewing machine to sew 1 -shirts for another company. The firm's costs are rent a space for 200, the sewing machine for 40 a day and pays its workers 36 a day. Labour (workers per day) Output (pairs of jeans per day) ------ 0 0 1 6 2 14 3 22 4 28 5 31 Output (pairs of jeans per day) Total Cost ( Per Day) ------ 0 240 6 276 14 312 22 348 28 384 31 420 What are the firms Total Fixed Costs? The marginal cost when the firm increases production from 28 to 31 pairs of jeans a day is The firm changes production between 31 to 22 pairs of jeans a day the marginal cost is

The table shows the total product schedule of a firm that uses 1 sewing machine to sew 1 -shirts for another company. The firm's costs are rent a space for 200, the sewing machine for 40 a day and pays its workers 36 a day. Labour (workers per day) Output (pairs of jeans per day) ------ 0 0 1 6 2 14 3 22 4 28 5 31 Output (pairs of jeans per day) Total Cost ( Per Day) ------ 0 240 6 276 14 312 22 348 28 384 31 420 What are the firms Total Fixed Costs? The marginal cost when the firm increases production from 28 to 31 pairs of jeans a day is The firm changes production between 31 to 22 pairs of jeans a day the marginal cost is
Transcript text: The table shows the total product schedule of a firm that uses 1 sewing machine to sew 1 -shirts for another company. The firm's costs are rent a space for $\$ 200$, the sewing machine for $\$ 40$ a day and pays its workers \$36 a day. \begin{tabular}{cc} \hline \begin{tabular}{c} Labour \\ (workers per day) \end{tabular} & \begin{tabular}{c} Output \\ (pairs of jeans per day) \end{tabular} \\ \hline 0 & 0 \\ 1 & 6 \\ 2 & 14 \\ 3 & 22 \\ 4 & 28 \\ 5 & 31 \\ \hline \multicolumn{3}{c}{ Output } & Total Cost \\ \hline (pairs of jeans per day) & 15 Per Day) \\ \hline 0 & 240 \\ 6 & 276 \\ 14 & 312 \\ 22 & 348 \\ 28 & 384 \\ 31 & 420 \\ \hline \end{tabular} What are the firms Total Fixed Costs? \$ $\square$ The marginal cost when the firm increases production from 28 to 31 pairs of jeans a day is $\$$ $\square$ The firm changes production between 31 to 22 pairs of jeans a day the marginal cost is $\$ \square$
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Solution

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To answer the questions, we need to analyze the given data and apply relevant economic principles.

Question 1: What are the firm's Total Fixed Costs?

Total Fixed Costs (TFC) are the costs that do not change with the level of output. In this case, the fixed costs include the rent for the space and the cost of the sewing machine.

  • Rent for space: \$200
  • Sewing machine: \$40

Total Fixed Costs (TFC) = Rent + Sewing machine TFC = \$200 + \$40 TFC = \$240

The firm's Total Fixed Costs are \$240.

Question 2: The marginal cost when the firm increases production from 28 to 31 pairs of jeans a day is \$ $\square$

Marginal Cost (MC) is the additional cost incurred by producing one more unit of output. It can be calculated by the change in total cost divided by the change in output.

From the table:

  • Total Cost at 28 pairs of jeans = \$384
  • Total Cost at 31 pairs of jeans = \$420

Change in Total Cost = \$420 - \$384 = \$36 Change in Output = 31 - 28 = 3 pairs of jeans

Marginal Cost (MC) = Change in Total Cost / Change in Output MC = \$36 / 3 MC = \$12

The marginal cost when the firm increases production from 28 to 31 pairs of jeans a day is \$12.

Question 3: The firm changes production between 31 to 22 pairs of jeans a day the marginal cost is \$ $\square$

Again, we use the Marginal Cost formula, but this time for the decrease in production.

From the table:

  • Total Cost at 31 pairs of jeans = \$420
  • Total Cost at 22 pairs of jeans = \$348

Change in Total Cost = \$420 - \$348 = \$72 Change in Output = 31 - 22 = 9 pairs of jeans

Marginal Cost (MC) = Change in Total Cost / Change in Output MC = \$72 / 9 MC = \$8

The marginal cost when the firm changes production from 31 to 22 pairs of jeans a day is \$8.

Summary
  1. The firm's Total Fixed Costs are \$240.
  2. The marginal cost when the firm increases production from 28 to 31 pairs of jeans a day is \$12.
  3. The marginal cost when the firm changes production from 31 to 22 pairs of jeans a day is \$8.
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