PART 2 and 3 OF FINAL EXAM—54 POINTS
INSTRUCTIONS FOR TABLE 1 and Two Graphs-21 points
A)
1) Calculate the Total Cost (TC) for each level of output. (3 points)
2) Calculate the Average Fixed Cost (AFC) for each level of output. (3 points)
3) Calculate the Average Variable Cost (AVC) for each level of output. (3 points)
4) Calculate the Average Total Cost (ATC) for each level of output. (3 points)
5) Calculate the Marginal Cost (MC) for each level of output. (3 points)
B)
Using the data from Table 1 draw two graphs:
1) Draw a graph showing the Total Fixed Cost, Total Variable Cost, and Total Cost curves.
(3
points)
2) Draw a graph showing the Average Fixed Cost, Average Variable Cost, and Average Total Cost curves
and Marginal Cost curve. (3 points)
TABLE 1
(1)
(2)
(3)
(4)
(5)
(6)
Total
Total
Total
Total
Average
Average
Product
Fixed
Variable
Cost
Cost
(Q)
(TFC)
(TVC)
0
$100
0
$______
1
100
90
______
______
______
______
______
2
100
______
______
______
______
______
3
100
240
______
______
______
______
______
4
100
300
______
______
______
______
______
5
100
370
______
______
______
______
6
100
450
______
______
______
______
______
7
100
540
______
______
______
______
______
8
100
650
______
______
______
______
______
9
100
780
______
______
______
______
______
10
100
930
______
______
______
______
______
Cost
(TC)
170
Fixed
(7)
Average
Variable
(8)
Marginal
Total
Cost
Cost
Cost
(AFC)
(AVC)
(ATC)
Cost
(MC)
______
______
INSTRUCTIONS FOR TABLE 2 and One Graph-11 points
A)
1) Calculate the Average Total Cost (TC) for each level of output. (2 points)
2) Enter the Marginal Cost data from Table 1
3) Calculate the Profit (+) or Loss (-) and enter the data in column 7. (2 points)
4) Indicate the level of output at which Profit will be maximized ______________. (2 points)
5) Calculate the Total Revenue and Total Cost at this level of output. (2 points)
Total Revenue $_________________
Total Cost $____________________
6) Draw a graph with the Marginal Cost Curve, Marginal Revenue Curve, Average Total Cost Curve and
Average Variable Cost Curve on the graph paper. (3 points)
TABLE 2
(1)
(2)
(3)
(4)
(5)
(6)
Total
Average
Average
Average
Marginal
Price=
Product
Fixed
Variable
Total
Cost
(7)
Total Economic
Marginal
Profit
(+)
Cost
(Q)
(AFC)
Cost
Cost
(AVC)
(ATC)
Revenue
or Loss (-)
(MC)
0
1
$100.00
2
50.00
3
33.33
$90.00
______
______
$131
85.00
______
______
$131
______
______
80.00
______
______
$131
______
75.00
______
______
$131
______
4
25.00
5
20.00
74.00
______
______
$131
______
6
16.67
75.00
______
______
$131
______
7
14.29
8
77.14
12.50
81.25
______
______
______
______
$131
$131
______
______
9
11.11
86.67
______
______
$131
______
10
10.00
93.00
______
______
$131
______
PART 3 OF FINAL EXAM—22 POINTS
TABLE ON ORGANIZATION AND FINANCING OF BUSINESS (22 points)
In the fill-in-the-blank boxes below you must put in the correct answers based upon the table that is in the lecture notes. Please DO
NOT be creative. Please DO NOT use your own words. Use the exact language that is in the lecture notes. If there are problems, I
will review answers. MAKE SURE THAT YOU FOLLOW THE NUMERICAL SEQUENCE OF THE ANSWERS, OTHERWISE
YOUR ANSWERS WILL BE MARKED WRONG.
TYPE OF
BUSINESS
FINANCING
PROPRIETORSHIP
1, 2
PARTNERSHIP
7-9
14-18
CORPORATION
LENGTH OF
LIFE
3
LIABILITY
WHO GETS
PROFITS?
WHO MAKES
DECISIONS?
4
5
6
10
11
12
13
19
20
21
22
PROPRIETORSHIP FINANCING
1.
2.
PROPRIETORSHIP--LENGTH OF LIFE (one word)
3.
PROPRIETORSHIP--LIABILITY (one word)
4.
PROPRIETORSHIP-WHO GETS PROFITS? (one word)
5.
PROPRIETORSHIP--WHO MAKES DECISIONS?
6.
PARTNERSHIP--FINANCING
7.
8.
9.
PARTNERSHIP--LENGTH OF LIFE
10.
PARTNERSHIP--LIABILITY
11.
PARTNERSHIP--WHO GETS PROFITS?
12.
PARTNERSHIP--WHO MAKES DECISIONS?
13.
CORPORATION--FINANCING
14.
15.
16.
17.
18.
CORPORATION--LENGTH OF LIFE
19.
CORPORATION--LIABILITY (one word)
20.
CORPORATION--WHO GETS PROFITS (six words)
21.
CORPORATION--WHO MAKES DECISIONS? (two words)
22.