Suppose That a Wheat Farm Has Total Fixed Costs (TFC)

question 44

Essay

Suppose that a wheat farm has total fixed costs (TFC) equal to $10, and the price of wheat (Py) is equal to $14/bu. Use a chart to find the profit-maximizing level of wheat for the farm to produce.
$\begin{array}{ccccccccccc}\mathrm{Y} & \text { TVC } & \text { TFC } & \text { TC } & \text { ATC } & \text { AVC } & \text { MC } & \text { TR } & \text { AR } & \text { MR } & \Pi \\0 & 0 & & & & & & & & & \\1 & 10 & & & & & & & & \\2 & 16 & & & & & & & & \\3 & 18 & & & & & & & & \\4 & 22 & & & & & & & & \\5 & 36 & & & & & & & & \\6 & 58 & & & & & & & & \\7 & 84 & & & & & & & &\end{array}$ A. Give an example of a fixed cost for the wheat farm; explain why it is fixed. B. Give an example of a variable cost for the wheat farm; explain why it is variable. C. Define opportunity costs and describe the farmer's opportunity costs. D. Do costs in the table above include opportunity costs? Explain. E. Explain why the total cost curve is shaped the way that it is. F. Briefly state the relationship between average and marginal costs. G. What is the profit-maximizing level of output? What is the maximum level of profits that the farm can earn? H. What is the breakeven price? What is the breakeven quantity? I. What is the shut down price? What is the shut down quantity? J. What happen to fixed costs in the long run? What are the break even and shut down points in the long run? K. Graph TC, TVC, TFC, ATC, AVC, and MC. Include labels and units.

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Definitions:

Cognitive-Behavioral Theorists

Scholars and practitioners who believe that psychological problems arise from faulty or negative thinking and behaviors, and that changing these can lead to improved mental health.

Emotional Cues

External or internal signals that indicate the emotional state of an individual or are meant to provoke an emotional response.

Schizoid Disorders

A cluster of mental conditions characterized by a long-standing pattern of detachment from social relationships and a limited range of emotional expression.

Psychoanalytic Therapists

Mental health professionals who use methods derived from psychoanalysis, focusing on uncovering unconscious motivations and early childhood influences on behavior.