Regulations: This assignment is an individual assignment. Students are encour

Regulations:

This assignment is an individual assignment. Students are encouraged to use their own words.
Students must follow Saudi Electronic University academic writing standards and APA style guidelines.
Support your submission with course material concepts, principles, and theories from the textbook, along with at least two scholarly, peer-reviewed journal articles.
A mark of zero is awarded for any submission that includes copying from other resources without proper referencing it.
It is strongly encouraged that the student submits his/her assignment into the Safe Assignment Originality Check before uploading it on the Blackboard.
Read the assignment guidelines earlier sent to your email IDs.

(CRITICAL THINKING-2 )
Q1. Suppose you are employed as an economist by a firm that operates in a perfectly competitive market and produces Jackets. The firm is operating in the short run. The price of the jacket is $9, the wage for each worker is $24, and each jacket requires $1 worth of material. The following table shows the relationship between the number of workers and the output of Jackets.
Workers
10
11
12
13
14
15

Output
5
29
41
47
50
52

Labor cost

Material cost

Fixed cost
$2
$2
$2
$2
$2
$2

Total cost

Marginal cost
–
2
3
5
9
13

Calculate the missing values in the table given.
Use the concept of marginal principle and advice the manufacturer about the number of jackets he should produce to maximize his profit.
Q2. What is the price elasticity of demand? How is it different from Income elasticity of demand? Take an example and explain how the concept of elasticity of demand and supply helps the market stakeholders.
Q3: Explain the following terms with suitable examples.
Constant returns to scale
Economies of Scale
Minimum efficient scale
Diseconomies scale

Q4:
Can Indivisible input factors affect the production cost? Take an example and discuss
How does marginal cost affect the average cost? Present the relation of marginal cost and average cost with the help of a graph.

Answers :-

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