Jigjiga University
Collage of Business and Economics
Department of Economics
Assignment One: For the course Engineering Economics
Total mark 15%
Instructor : Ahmed. M
Instructions:
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This is a group assignment. A group should consist of 3 to 5 people. Assignments submitted
individually will not be accepted.
Submit your assignment on or before August 19, 2017.
1) Suppose a cost function of a given plant is given as :
C(Q) = 4Q2+Q+140.calculate
a) TVC of producing of 4 units.
b) What is MC of 4th unit?
c) The AC of 4 units.
d) From answer C and D above, determine whether AC is rising or falling.
2) The long run production function of a particular firm is given as
Q=0.5L0.5k0.4 and per unit cost of labor and capital are respectively 3 and 5
birr with cost of 100 birr.
a) Calculate the equilibrium (optimal) combination of inputs and outputs.
b) Find the marginal productivity of factors at equilibrium.
c) Calculate MRTSKL.
3) Discuss the relation between the marginal cost and Average total cost.
4) Talk about Economies of Scale.