| | :Example: a firm can produce 100 units with 5 workers and 200 units with 10 workers. Its fixed cost is $50 and its wage rate is $20 per day. What is its total cost and average variable cost to produce 100 units? | | :Example: a firm can produce 100 units with 5 workers and 200 units with 10 workers. Its fixed cost is $50 and its wage rate is $20 per day. What is its total cost and average variable cost to produce 100 units? |
| − | ::Answer: note first that the question asks about the costs at 100 units in output, not 200 units. Total cost at 100 units is the fixed cost ($50) plus the labor cost ($20 times times 5 workers, or $100), for a total of $150. The average variable cost is the total cost ($150) minus the fixed cost ($50), divided by the output (100), for a total of $10 per unit. | + | ::Answer: note first that the question asks about the costs at 100 units in output, not 200 units. Total cost at 100 units is the fixed cost ($50) plus the labor cost ($20 times 5 workers, or $100), for a total of $150. The average variable cost is the total cost ($150) minus the fixed cost ($50), divided by the output (100), for a total of $1 per unit. |
| | If there is one unifying theme to this course, then I suggest it is summarized in the Jesus's Parable of the Talents. Be productive, and give God the opportunity with your work. If you reach out, if you do more, if you make good use of your time, if you maximize your efficiency, if you consider the opportunity costs, and if you increase your output, then you give God more to work with. But if you bury your talent in the ground or if you are like the tree that does not bear fruit, then you give God less to use for His purpose. | | If there is one unifying theme to this course, then I suggest it is summarized in the Jesus's Parable of the Talents. Be productive, and give God the opportunity with your work. If you reach out, if you do more, if you make good use of your time, if you maximize your efficiency, if you consider the opportunity costs, and if you increase your output, then you give God more to work with. But if you bury your talent in the ground or if you are like the tree that does not bear fruit, then you give God less to use for His purpose. |