Indicate whether the following statement is TRUE or FALSE and explain your answer: Firm's average-total-cost curve is the same in the short run and in the long run because opportunity costs are included in both horizons.
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Indicate whether the following statement is TRUE or FALSE and explain your answer: Firm's average-total-cost curve is the same in the short run and in the long run because
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- Consider the table below that describes the costs associated with producing a good (Q). Q Total Variable Cost Total Cost 0 0 30 1 30 60 2 50 80 3 65 95 4 77 107 5 87 117 6 100 130 7 120 150 8 160 190 9 220 250 10 300 330 What is the value of the marginal cost of producing the second unit? Enter your answer as a number below. Do not include a "$" sign.Discuss the impact of rational self-interest on each of the following decisions. Whether to attend college full time or enter the workforce full time Whether to buy a new textbook or a used one Whether to attend a local college or an out-of-town college (Production in the Short Run) Complete the following table. At what point does diminishing marginal returns set in? Units of the Variable Resource Total Product Marginal Product 0 0 — 1 10 — 2 22 — 3 — 9 4 — 4…What are the risks of focusing on sunk costs and ignoring opportunity costs? Describe some examples in business or everyday life where you have seen or personally been tripped up by not fully understanding sunk and opportunity costs?
- Suppose a hugely successful Web company has used freeconomics, expanded its scale of operations, and spread its long-run costs over larger and larger audiences. However, after years of profits, its continued growth has now caused the company’s profits to fall. Using production costs theory, explain why this situation might be occurring.the run up in grain prices of the past 6 months has now caused an increase in the price of farmland. Since farmland is one of the major inputs in production of corn, the higher price for land will increase every farmer’s cost. Even if the farmer already owns land they previously purchased at lower prices, they have to recognize that the new higher price of land is their opportunity cost: they could just sell the land and receive the new higher price of land. show shifts in any of the cost curves, reflecting the higher cost of land (keeping in mind that this higher cost is independent of how much or how little corn is actually produced) and labeling the changed cost curves with a subscript 1. On the graph with $ on the vertical axis and individual firm output q on the horizontal axis, draw the P1 . What is the new profit maximizing output q1 for this typical firm? Graphically depict the size of profits or losses (negative profits) at the new price P1. Is the firm making positive or…If the average-total-cost curve is falling, what is necessarily true of the marginal-cost curve? If the average-total-cost curve is rising, what is necessarily true of the marginal-cost curve?
- Consider the table below that describes the costs associated with producing a good (Q). Q Total Variable Cost Total Cost 0 0 30 1 30 60 2 50 80 3 65 95 4 77 107 5 87 117 6 100 130 7 120 150 8 160 190 9 220 250 10 300 330 What is the value of the average total cost when Q=2? Enter your answer as a number below. Do not include a "$" sign.Extra The problem of principle agent can be reduced if it is possible to pay the worker a) weekly salary b) a wage based on the number of units produced c) an hourly wage d) out of retained earnings The law of diminishing returns results in a) an eventually rising marginal product curve b) a total product curve that eventually increases at a decreasing rate c) an eventually failing marginal cost curve d) a total product curve that rises indefinitely Which of the following is an example of the prinicipal/agent problem? a) A consumer buys a defective good because she does not know the quality of the good b) A sports agent invests money for a client and the company he invests in goes busy so the athlete doesnt get back the principal on his investment c) a worker shirks off while his boss is on vacation d) a company continues to produce despite losses because of fixed costsRelating to these two objectives, please answer the following: Examine the principles and theories underlying the concepts of production and cost as well as the relationship between these two concepts. Analyze these principles of production and cost in order to derive the optimum behavior of producers and sellers Question 1 You are a manager of an advertising company. The company is running short of funds, so you decide to increase revenue. Should you increase or decrease the price of running ads? Explain. Question 2 You own a printing firm. Two of your senior managers provide you with advice. The first manager states that your company is losing money for every unit that is printed. To minimize losses, she advises that you reduce your production levels. The second manager states that if your firm sells some more units, the price will cover your increase in costs. In order to reduce losses, the second manager recommends that you should increase production. Explain which manager is…
- Explain the law of increasing opportunity cost in this graphsuppose the average variable cost of production is $15 when output equals 110 haircuts and $17.26 when output equals 140 haircuts. If the firm wants to maximize profit how many haircuts will it produce at what cost? explain your answer.Illustrate the link between the cost-minimization problem and total cost curve. What would happen to the total cost curve if the firm increases level of output?
