1. 2. Student: _____________________ Date: _____________________ Instructor: Robin Dhakal Course: ECON 201 Microeconomics Assignment: Exam 2- F21 Gao's restaurant produces tacos using workers. The...

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1. 2. Student: _____________________ Date: _____________________ Instructor: Robin Dhakal Course: ECON 201 Microeconomics Assignment: Exam 2- F21 Gao's restaurant produces tacos using workers. The table below shows how many tacos can be served per hour with different quantities of workers. What is the marginal product and average product of labor for her restaurant? To answer this question, fill in the marginal product of labor and the average product of labor in the table below.   (Enter numeric responses using real numbers rounded to two decimal places.) Quantity of Workers Quantity of Tacos Marginal Product of Labor Average Product of Labor 0 0 - - 1 5 2 13 3 17 4 19 5 20 (1) Use the graph for Yolanda's Frozen Yogurt Stand to answer the questions that follow. Use the midpoint formula to calculate the price elasticity of demand for between point A and point C and the price elasticity of demand for between point A and point B. D1 D2 Price elasticity of demand for D1 = (Enter your response rounded to two decimal places. Be sure to include the minus sign. ) Price elasticity of demand for D2 = (Enter your response rounded to two decimal places. Be sure to include the minus sign. ) Which curve is more elastic? (1) Suppose Yolanda is initially selling cones per day at a price of $2.50 per cone. If she changes her price to $ per cone and her demand curve is D1 , what will be the change in her revenue? $ 20 2.00 What will be the change in her revenue if her demand curve is D2 ? $ 0.0 10.0 20.0 30.0 40.0 50.0 0.00 0.25 0.50 0.75 1.00 1.25 1.50 1.75 2.00 2.25 2.50 2.75 3.00 3.25 3.50 3.75 4.00 Quantity (cones per day) Pr ic e (d ol la rs p er c on e) A 23 B 28 C D1 D2 D2 D1 P1 P2 3. 4. (1) normal and a necessity normal and a luxury inferior Suppose that after hurricane Irene, the average income in Cape Charles, Virginia decreased by percent. In response to this change in income, suppose the quantity of steak demanded in Cape Charles (holding the price of steak constant) decreased by percent. What is the income elasticity of demand for steak in Cape Charles? 18 12 The income elasticity of demand for steak in Cape Charles is . (Enter your response rounded to two decimal places.) In this instance, steak in Cape Charles is (1) . Suppose that the price elasticity of demand for iPhone is -2.70, cross-price elasticity of demand between iPhones and iPads is -0.90, and income elasticity of demand of iPhone is 1.95. How do you interpret each of those numbers? Explain what each of those numbers mean about the iPhones and iPads. 5. On chapter 7, we learned the concepts of utility maximization. Based on your understanding from the chapter, explain where a demand curve comes from. In other words, how do we use utility maximization principle to create a demand curve? Explain the steps.[Hint: explain the process by which we created the demand curve on the grapes/banana example we did in class] 6. 7. Use the information in the graph to the right to find the values for the following at an output level of .30 The marginal cost is $ . (Enter a numeric response using an integer.) The total cost is $ . The variable cost is $ . The fixed cost is $ . 0 0 100 Quantity of output C os t The following table shows Madison's utility from consuming popcorn and Coke. Suppose that Madison has income of $ , the price of popcorn is $ , and the price of Coke is $ . If Madison wants to maximize her utility, how much popcorn and Coke should she buy? 39.00 3.00 13.50 Popcorn Coke Quantity Marginal Utility Marginal Utility 1 96 144 2 72 108 3 48 72 4 24 36 5 12 18 6 6 9 Madison should buy boxes of popcorn and cans of Coke. (Enter your responses as integers.) MC ATC AVC 30 27 50 69