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Unit 3 Problem Set Rubric
Instructions1. Put away you pen and pencils2. Put your name where it says “Graded
by:”3. We will grade questions 1 and 44. After grading each question, write in
their score in the blank. ex: ( ____/5)5. Follow the directions explicitly!
Questions #1:Real World Examples
20 Points Total
5 Point Total 2 Points- Definition (As additional inputs
(workers) are added to fixed resources, the additional output generated by each new input will eventually fall.
2 Points- Example showing that MARGINAL PRODUCT (additional output from each new worker) will eventually fall
1 Point (Clarity)- Numbers in example (numbers show how marginal product eventually falls)
A. Law of Diminishing Marginal Returns
5 Point Total 1 Point- definition of fixed costs (costs that DO NOT change with the amount
produced)1 Point- Example of a fixed costs/resource1 Point- definition of variable costs (costs that change with the amount
produced)1 Point- Example of a variable cost/resource1 Point- definition of total cost (fixed plus variable cost)
B. Fixed, Variable, and Total Costs
5 Point Total 1 Point- definition of accounting profit(revenue minus accounting cost or
traditional out of pocket costs)1 Point- Example excluding opportunity cost1 Point- definition of economic profit (revenue minus accounting and opportunity
cost)1 Point- Example including opportunity cost1 Point- Clarity of examples
C. Accounting vs. Economic Profit
5 Point Total 1 Point- definition of economies of scale(Long run costs fall as mass production
techniques are used)1 Point- Example 1 Point- definition diseconomies of scale(Long run costs increase as the business
becomes difficult to manage) 1 Point- Example1 Point- Clarity of examples
D. Economies and diseconomies
3. Cory’s Surfboard Inc.20 Points Total
3.The Chart
1 Point 1 Point 1 Point 1 Point 1 Point
5 Point Total
5 Point Total 1 point- Correctly labeled axis with numbers 1 point- Correctly plotted MC1 point- Correctly plotted ATC1 point- Correctly plotted AVC1 point- Correctly plotted AFV
3. A: Plotted Graph
Quantity
Co
st/P
rice
AFC
AVC
ATCMC
5 Point Total 1 Point- Cory’s MC, ATC, and AVC
curves would increase.1 Point- Fixed costs will not change 1 Point- Each correct shift
Question #3B
Quantity
Co
sts
(do
llar
s)
AFC
AVCATC
MCATC1
AVC1
MC1
5 Point Total 1 point- Output = 7 surfboards1 point- Explanation- Cory should produce where
MR=MC to maximize profits2 point- $65.71 Profit per Unit1 point- Explanation- Cory is selling each unit for
$150 and his cost for each surfboard is $84.29.
OR
Total Profit equals TR ($1050)- TC ($590)= $460$460 divided by 7 equals $65.71
Question 3.C.
4. Practice FRQs
5. Perfect Competition10 Points Total
P
Q
P
Q5000
D
S
Industry Firm
$10 $10
15
MR=D
MC
8
5 Points- Long Run to Short-Run5 Points- Short-run back to Long-run
ATC
Copyright ACDC Leadership 2015
P
Q
P
Q5000
D
S
Industry Firm
$10 $10
16
MR=D
MC
8
D1
$5
Demand Increases The price increases and quantity increases
Profit is made in the short-run
ATC
MR1=D1
7
$5
Copyright ACDC Leadership 2015
P
Q
P
Q5000
D
S
Industry Firm
$10 $10
17
MR=D
MC
8
D1
$5
Demand Increases The price increases and quantity increases
Profit is made in the short-run
ATC
MR1=D1
7
$15
S1
3000Copyright ACDC Leadership 2015
P
Q
P
QIndustry Firm
$10 $10
18
MR=D
MC
8
D1
Demand Increases The price increases and quantity increases
Profit is made in the short-run
ATC
S1
3000Copyright ACDC Leadership 2015