Economic theory

In one hour, Sue can produce 40 caps or 4 jackets and Tessa can produce 80 caps or 4 jackets.
a.

Calculate Sues opportunity cost of producing a cap.

b.

Calculate Tessas opportunity cost of producing a cap.

When the price of pizza falls from $9 to $7 and other things remain the same, the quantity ofpizza demanded increases from
100 to 200 an hour, the quantity of burgers demanded decreases from 200 to 100 an hour, and the quantity of cola demanded
increases from 150 to 250 cans an hour.
a.
Calculate the cross elasticity of demand for cola with respect to pizza.
b.

Calculate the cross elasticity of demand for burgers with respect to pizza.

Bill and Ted operate a small company that produces souvenir footballs. Their fixed cost is $2,000 per month. They can hire
workers for $1,000 per worker per month. Their monthly production function for footballs is as given in the following table:

For each quantity of labor, calculate average variable cost (AVC), average fixed cost (AFC), average total cost (ATC), and
marginal cost (MC).