Economics Question
1 Using Figure 1. in Class Note 2 to explain why the average cost is initially high, then goes down, and is back up again?
(Make sure you understand the concepts of total cost, fixed cost, and variable cost).
2 Define marginal cost
3 Use Figure 2 in Class Note 2 to describe the marginal cost for a traditional product
(non-informational product)
4 Use Figure 4 in Class Note 2 to explain why the marginal cost for an informational product such as a CD, an ebook, an ejournal, can be constant
5 Use Figure 5 to point out the optimal production point and explain why
6 Explain why total cost always increases (see Figure 6 in Class Note 2)
7 Explain why the supply curve shifts upward when quantity increases (see Figure 7 in Class Note 2)
Economics
