Homework Help is Here – Start Your Trial Now!
Business
Economics
The following table shows the end of the year account entries of a small company Item Amount ($) Total Revenue    560,000.00 Wages and Salaries    420,000.00 Ingredients and Materials      50,000.00 Interest paid      10,000.00 Other Payments      10,000.00 Forgone Salary      60,000.00 Forgone rent      12,000.00 Forgone interest        4,500.00   a. According to the above information calculate the following:         I.  Implicit and explicit cost         II. Economic profit and normal profit/loss   b. Briefly explain the following economic concepts with appropriate examples         I.  Economies of scale and diseconomies of scale          II. Law of diminishing marginal returns and increasing marginal returns

The following table shows the end of the year account entries of a small company Item Amount ($) Total Revenue    560,000.00 Wages and Salaries    420,000.00 Ingredients and Materials      50,000.00 Interest paid      10,000.00 Other Payments      10,000.00 Forgone Salary      60,000.00 Forgone rent      12,000.00 Forgone interest        4,500.00   a. According to the above information calculate the following:         I.  Implicit and explicit cost         II. Economic profit and normal profit/loss   b. Briefly explain the following economic concepts with appropriate examples         I.  Economies of scale and diseconomies of scale          II. Law of diminishing marginal returns and increasing marginal returns

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
See similar textbooks
icon
Related questions
Question

The following table shows the end of the year account entries of a small company

Item

Amount ($)

Total Revenue

   560,000.00

Wages and Salaries

   420,000.00

Ingredients and Materials

     50,000.00

Interest paid

     10,000.00

Other Payments

     10,000.00

Forgone Salary

     60,000.00

Forgone rent

     12,000.00

Forgone interest

       4,500.00

 

a. According to the above information calculate the following:

        I.  Implicit and explicit cost

        II. Economic profit and normal profit/loss

 

b. Briefly explain the following economic concepts with appropriate examples

        I.  Economies of scale and diseconomies of scale 

        II. Law of diminishing marginal returns and increasing marginal returns 

 

 
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
Economics
ISBN:
9780190931919
Author:
NEWNAN
Publisher:
Oxford University Press
Principles of Economics (12th Edition)
Principles of Economics (12th Edition)
Economics
ISBN:
9780134078779
Author:
Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher:
PEARSON
Engineering Economy (17th Edition)
Engineering Economy (17th Edition)
Economics
ISBN:
9780134870069
Author:
William G. Sullivan, Elin M. Wicks, C. Patrick Koelling
Publisher:
PEARSON
Principles of Economics (MindTap Course List)
Principles of Economics (MindTap Course List)
Economics
ISBN:
9781305585126
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Managerial Economics: A Problem Solving Approach
Managerial Economics: A Problem Solving Approach
Economics
ISBN:
9781337106665
Author:
Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:
Cengage Learning
Managerial Economics & Business Strategy (Mcgraw-…
Managerial Economics & Business Strategy (Mcgraw-…
Economics
ISBN:
9781259290619
Author:
Michael Baye, Jeff Prince
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS