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CHAPTER 10:
Cost Functions
ANSWER: b
ANSWER: c
10.3 In order to minimize the cost of a particular level of output, a firm should produce where
v
b. the RTS (of L for K) = .
w
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 10: Cost Functions 39
w
c. the RTS (of L for K) =
v
v
d. the MRS = .
w
ANSWER: c
b. cost-minimizing input choices for all possible output levels for when input rental
rates expand along with production.
c. cost-minimizing input choices for all possible output levels for a fixed set of input
prices.
ANSWER: c
a. is a straight line through the origin with a slope greater than one if w > v.
b. is a straight line through the origin with a slope less than one if w < v .
c. is a straight line through the origin though its slope cannot be determined by w
and v alone.
ANSWER: c
10.6. A firm whose production function displays increasing returns to scale will have a total
cost curve that is
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly
accessible website, in whole or in part.
40 Chapter 10: Cost Functions
ANSWER: b
10.7 A linear total cost curve which passes through the origin implies that
ANSWER: c
10.8 As long as marginal cost is below average cost, average cost will be
a. falling.
b. rising.
c. constant.
ANSWER: a
a. both average total costs and average variable costs will be falling.
b. average total costs will be falling but average costs may be rising or falling.
d. average total costs are falling but average fixed costs may be rising.
ANSWER: a
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 10: Cost Functions 41
10.10 The average fixed cost curve always has a negative slope because
ANSWER: d
b. the underlying nature of the firm's production function when all inputs are able to
be varied.
d. the way in which the firm's expansion path reacts to changes in the rental rate on
capital.
ANSWER: b
a. marginal costs are constant but the average cost curve has a U-shape.
ANSWER: b
b. are usually greater than or equal to its short-run costs except in the case of
diminishing returns to scale.
d. are usually less than or equal to its short-run costs except in the case of
diminishing returns to scale.
ANSWER: c
10.14 An increase in the wage rate will have a greater effect on average costs
a. the larger the proportion labor costs are of total costs and the easier it is to
substitute capital for labor.
b. the larger the proportion labor costs are of total costs and the harder it is to
substitute capital for labor.
ANSWER: b
b. not affect the production function, but may shift cost curves.
c. shift a firm's production function and alter its marginal revenue curve.
d. shift a firm's production function and cause more capital (and less labor) to be
hired.
ANSWER: a
10.16 The Cobb-Douglas production function q = k .5 l .75 yields the cost function C =
(where B is a constant).
a. Bq v1 2 w3 4 .
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly
accessible website, in whole or in part.
Chapter 10: Cost Functions 43
5/4
b. Bq v1 2 w3 4 .
4/5
c. Bq v1/2 w3/4 .
4/5
d. Bq v 2/5 w3/5 .
ANSWER: d
.8
10.17 For the cost function C = q v .4 w.6 consider the following statements:
a. None is true.
c. Only I is true.
ANSWER: d
ANSWER: a
10.19 The input demand functions that can be derived from cost functions are referred to as
“contingent” demand functions because the functions:
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly
accessible website, in whole or in part.
44 Chapter 10: Cost Functions
ANSWER: b
ANSWER: b
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly
accessible website, in whole or in part.
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the same time, we must sincerely and earnestly desire to liberate,
and send back to their own country, as soon as we can.
A VIRGINIAN.
The Western Monthly Magazine concurs with us in our opinions of Vathek. The editor
says, "Vathek is the production of a sensual and perverted mind. The events are
extravagant, the sentiments pernicious, and the moral bad. It has nothing to
recommend it but ease of style and copiousness of language."
It is said, and truly said, that "Truth is often more incredible than
fiction." It is natural too, that we should take a deeper interest in the
fortunes of creatures of flesh and blood, who have actually lived and
suffered, than in the imaginary sorrows of beings that are
themselves but figments of the writer's brain.
The great art, and the great charm of Walter Scott, is that he never
describes his characters. He brings us into their society, and makes
us know them. But how shall I make known the persons of whom I
wish to speak? I can say that HE was generous and brave, sincere,
and kind, and true, and that SHE was fair and gentle, and pure and
tender. These are but words, and have been repeated till they have
lost their meaning. I can say that both loved; but how can I show
the passion flashing in the eye, and glowing in the cheek—and how
can I give it breath in their own burning words? I heard them not.
None heard them. I can say that the hand of destiny was upon
them, and tore them asunder, to meet no more. I can even use the
words of one whose strains he loved, to tell
"That neither ever found another
To free the hollow heart from paining;"
but how can I develope the mysterious means by which this destiny
was accomplished? How could I speak, but in their own words,
uttered only to the midnight solitude, the deep yearnings of their
hearts—and the noble enthusiasm which made it the task of his life
to render glorious the name of him she had honored with her love?
Could these details be given truly, what a romance of real life would
they form! Let the reader judge from the following lines found
among his papers, when the damps of the grave had at last cooled
the fever of his brain.
THE PRAYER.
Augusta, Georgia.
BY A VIRGINIAN.
2 In Godwin's Inquirer, are some very just and forcible observations on the corrupting
effect upon youth, of too close and numerous an association with each other. He
applies it to large boarding schools. The enlightened President of a Rhode Island
University, on similar grounds (as he told me), does all that he can to discourage
students from boarding and lodging in College. Observation and experience had
shewn him the danger of spontaneous combustion, from the too near approach of
human passions and weaknesses. The same principle applies to the case of Factory
hands: only, here, are superadded, elements which incalculably enhance the danger.
It is bed time, and I must forbear saying more at present. Yet I have
not done with New England: there remain several topics, which I
incline to touch. So you shall hear from me at my next stopping
place.
Manual Labor Schools (on the Fellenberg plan) have not multiplied
there, or grown in esteem, as might have been expected from the
forwardness of the people in adopting every valuable improvement;
and particularly, from the congeniality of this one with their own
long-cherished custom, of blending labor with study. Possibly, this
very custom may, in their eyes, make the improvement unnecessary:
since their youth already substantially enjoy its advantages. To study
in winter—to work in summer—has, time out of mind, been the
routine of New England education: differing from the Fellenberg
method only in having the alternations half-yearly, instead of half-
daily.—Franklin, the Trumbulls, Sherman, Dwight, Pickering, Webster,
Burges, and all the illustrious self-made men, who have rendered
that otherwise unkindly soil so verdant with laurels, were nurtured
strictly in the discipline of manual labor schools: and perhaps the
new method would be quite needless, were not the progress of
wealth, luxury, indolence and pride, now rapidly swelling the
numbers of those who, urged by no necessity, and relying upon no
exertions of their own for distinction, would never feel the salutary
influence of labor, if not sent to schools where it is taught; and were
not the same progress multiplying those also, who never could
procure instruction, except by the opportunity which this method
affords them, of purchasing it by their labor. Perhaps too, the
Common Schools (in which poor and rich are equally entitled to
learn) may tend still more to render the new plan useless; as to the
branches of knowledge taught in them.
There are few names which can justly be relied upon, thus to speak
the epitaphs of those who bore them. Among those few, doubtless,
is the name of KOSCIUSKO. History, and the halo thrown around that
name by Campbell, will ensure it a place among the "household
words" of Poland and America, and of every people who shall speak
the language or breathe the spirit of either.
Good night.
CITY OF MEXICO—CHAPOLTEPEC.
May 25, 1825.—This morning we made our entree into the city of
Mexico. Passing through the little villages of Istapalapa and
Mexicalsingo, we rode for several miles over a paved causeway—
calzada—lined with the schinus,1 aspins, and a species of willow very
much resembling the lombardy poplar—in sight of the numerous
towers and domes which rise above the scarcely visible flat-roofed
houses of the city. The approach to it, but for this and other fine
avenues, would be perfectly tame, as its situation is a level, whose
elevation above the plain which surrounds it is quite imperceptible.
From the gate—garita—we turned into the Paseo de las Vigas, a
beautiful promenade on the bank of the canal, which leads from
Chalco, through the eastern portion of the city, into the lake of
Tescuco. We were here joined by the few American residents of
Mexico, and accompanied by them, soon entered its streets, which
in the suburbs are exceedingly filthy, but as we advanced, they were
clean, well paved, but not wide, with good yet narrow sidewalks of
broad flags of porphyry. My first feeling was disappointment—not so
much with the city, as with the crowds of wretched ill-dressed
people, of beggars, and poor half-naked Indians, bending under
heavy burdens. There are no carts or drays for the transportation of
goods, which are carried upon the backs of these poor creatures,
who are enabled to carry a load of three hundred pounds, by means
of a leather band or strap, the cargador leaning forward at an angle
of about 45°, the burden resting on the back, supported by this
strap. With so heavy a load they travel great distances, moving in a
brisk walk or trot.
1 The Schinus or Arbol de Peru is a beautiful tree, somewhat resembling a willow; it is
odorous, and bears in bunches a small red berry, which is almost as pungent as black
pepper, as a substitute for which it is used by the poorer people.
The streets of Mexico run nearly from north to south, and from east
to west, crossing at right angles. The greatest longitudinal length is
about two miles—the latitudinal about a mile and three quarters;2
but as the figure of the city is unequal, these lengths are far from
uniform. In either direction the view is terminated by the mountains
which bound the plain of Mexico. In the central and most frequented
parts of the city, the streets are well paved and are kept clean; but
apart from these, they are amazingly dirty—the drains passing
through the centre being open, offensive both to the sight and to
the smell.
2 This measure does not mean the distance of the opposite garitas or custom-house
gates from each other, which is considerably greater—but comprises the compactly
built part of the city, not comprehending the scattered houses in the outskirts.
The Plaza Mayor is the principal open square in the centre of the
city. On the northern side of it is the cathedral; the government
house, formerly the vice regal palace, occupies its eastern side; on
the southern and western sides are the Cabildo, (town-hall,) and
colonnades or portales, within which are the principal stores, and
where varieties of goods and trinkets, lottery tickets and shilling
pamphlets, are sold. In the southeastern portion of this square stood
the magnificent equestrian statue of Charles IV, raised on a fine
pedestal, and surrounded by a handsome iron railing. It has been
removed lately to the patio or court of the university, where it
remains to be admired for its admirable workmanship in bronze,
although it is seen to disadvantage in a compass too confined for it.
In the southwestern part of this plaza stands a collection of stores, a
sort of bazaar, called the Parian, which disfigures it extremely; but as
the city derives a large revenue from the rent, there is little prospect
of the levelling system being extended to this little town of shops.
The cathedral is a splendid edifice, with a front of three hundred and
fifty feet, upon the plaza. It stands upon the same spot which the
famous Aztec Temple of Huitzilopochtli occupied. The eastern part of
the front, built of red tetzontli, is a curious gothic, bearing a more
antique appearance than the other portion, which last, indeed, is the
front to the body of the edifice. This is built of gray porphyry,
ornamented with pilasters and statues, and surmounted by two
handsome towers. The interior is very rich and magnificent; the
dome is lofty and supported by large stone columns. The grandeur
of the whole is diminished greatly by the choir, which occupies a
large portion of the nave, and is connected with the chief altar by a
railing of bronze, surmounted by silver figures supporting branches
for candles. A superb chandelier of silver is suspended nearly under
the great dome in front of the grand altar, which is richly
ornamented with gold and silver. The tout ensemble has an imposing
effect; and at night, when illuminated, with the music of a full choir,
instrumental and vocal, the impressions it makes are irresistibly
strong. The depth of the whole edifice is about four hundred and
fifty feet.3
3 The entire length of the interior of the cathedral is 373 feet—its width 179 feet.
Those in the journal are the external dimensions. The structure was begun in 1573,
and cost $1,752,000. It was dedicated in 1667. The grand altar bears a later date,
and was dedicated in 1743.
* * * * *
Less than a league from the city to the west, is the porphyritic rock
of Chapoltepec,4 which rises one hundred and sixty feet above the
plain. On its summit is a palace or castle built by the Viceroy Galvez,
but never finished. Towards the city it bears the appearance of a
fortress, and the work is so constructed as to withstand a siege. The
founder, no doubt, had it in view in its construction, as the resort of
the Viceroy in case of insurrection among the people, of which there
had been several instances. The view of the city and plain of Mexico
from this spot, is remarkably beautiful. Baron Humboldt, whose
enthusiasm sometimes led him to extravagance, thus eloquently
describes it:5 "Nothing can be more rich and varied than the picture
which the valley presents, when, on a fine summer's morning, the
heaven being cloudless and of that deep blue which is peculiar to
the dry and rarified air of high mountains, we ascend one of the
towers of the Cathedral of Mexico, or the hill of Chapoltepec. A
beautiful vegetation surrounds this hill. The ancient trunks of
cypress, of more than fifteen or sixteen metres6 in circumference,
divested of foliage, rise above those of the schinus, which, in figure,
resemble the weeping willows of the east. In the depth of this
solitude, from the top of the porphyritic rock of Chapoltepec, the eye
overlooks a vast plain with well cultivated fields, which extend even
to the foot of the colossal mountains, covered with perpetual ice.
The city seems washed by the waters of the lake of Tescuco, whose
basin, surrounded by villages and hamlets, reminds one of the most
beautiful lakes of the mountains of Switzerland. Long avenues of
elms and poplars lead on all sides to the capital. Two aqueducts,
constructed upon lofty arches, cross the plain, and present an aspect
both agreeable and interesting. To the north is seen the magnificent
convent of Our Lady of Guadalupe, with the mountains of Tepexacac
behind it, among ravines which furnish shelter to dates and tufted
yuccas. To the south, the whole country between San Angel,
Tacubaya, and San Agustin de las Cuevas, appears an immense
garden of oranges, peaches, apples, cherries, and other European
fruit trees. The beautiful cultivation is contrasted with the savage
aspect of the bald mountains which enclose the valley, and among
which are distinguished the famous volcanoes of Puebla, the
Popocatepetl, and Iztaccihuatl. The first forms an enormous cone,
whose crater, constantly inflamed, throwing out smoke and ashes,
opens in the midst of eternal snows."
4 Chapoltepec signifies the mountain of grasshoppers; from Chapolin, a grasshopper,
and tepetl, mountain.
5 Vol. 2, Book 3, c. 8.
* * * * *
In two subjoined articles, extracted from the "American Annals of Education," a very
useful periodical, published in Boston,—are the same which are referred to by an
intelligent correspondent in the last number of the "Messenger." (See page 205.)
They are well worth the reader's attention.