The law of diminishing marginal returns explains why the short run average total cost curve and the short run average variable cost curves are U-shaped why the production possibilities curve is bowed out why total revenue is a straight line none of the above

The law of diminishing marginal returns explains why the short run average total cost curve and the short run average variable cost curves are U-shaped why the production possibilities curve is bowed out why total revenue is a straight line none of the above

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter12: The Cost Of Production

Section: Chapter Questions

Problem 3CQQ

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The table shows three short-run cost schedules for three plants of different sizes that a firm might build in the long run. Plant 1 Plant 2 Plant 3 Output ATC Output ATC Output ATC 10 $ 10 10 $ 15 10 $ 20 20 9 20 10 20 15 30 8 30 7 30 10 40 9 40 10 40 8 50 10 50 14 50 9 What is the long-run average cost of producing 10 units of output? Multiple Choice $10 $15 $20 $45
Requireda. How much is the fixed cost to produce the natural-organic oil? b. How many barrels of natural-organic oil should the firm produce to maximize its profit? c. How much is the price of the natural-organic oil per barrel? d. At what production level would the marginal cost exceed the average cost? e.bHow many barrels of natural-organic oil reflect the lowest minimum average variable cost?
Why does the marginal product curve have an inverted “U” shape?2. Using diagrams, explain the relationship between the marginal product curve andmarginal cost curve? 3. What are the three stages of production? At which stage of production should a profit-maximising firm produce? 4. Fill in the appropriate numbers in the blank spaces, given the following information:output Total fixedcost (RM) Totalvariable cost(RM) Averagefixedcost(RM)Averagetotal cost(RM)Marginalcost(RM) 0 100 01 100 202 100 503 100 604 100 655 100 70 5. Complete the table below: Output TotalCost(RM) Totalvariablecost(RM) Totalfixedcost(RM)Averagefixedcost(RM)Averagetotalcost(RM)Marginalcost (RM) 0 505 16010 20020 25036 33058 40072 48088 580106 700130 820150 980
Which of the following profits represent economic profit? Choose all that apply. a. Your company sells 1,000 cars per month. Each car costs $20,000. Your cost for parts is $4 million. Your labor costs are $3 million. Your total profit is $13 million. b. During the summer, you make ten go-karts and sell each one for $100. It costs you $200 in supplies. You could have made $500 during the summer if you had chosen to deliver phone books. Your total profit is $300. c. A restaurant makes $10,000 per month in total revenue. Supplies cost $2,000 per month, and labor costs are $3,000 per month. The restaurant's profit is $5,000. d. A high-end airplane company sells five private jets per year. Each jet is sold for $10 million. The profit margin is 12 percent. If you were to change course and make yachts with the same available resources, you would make no additional profit.
Which of the following statements about average and marginal cost is INCORRECT? (2)(1) The marginal cost curve cuts both the average cost and average variable costcurves at their minimum points;(2) The marginal cost curve cuts both the average fixed cost and average variablecost curves at their minimum points;(3) The marginal cost curve lies below the average cost curve when average costis decreasing;(4) Marginal cost is the change in total cost when one extra unit of output isproduced.
(Scenario: Accounting and Economic Profit) Use Scenario: Accounting and Economic Profit. What is the opportunity cost of Wang's $100,000 inheritance being used to start his business?Scenario: Accounting and Economic ProfitRather than put the $100,000 that his grandmother left him in a mutual fund that earns 5% each year, Tommy Wang quit his job, which paid $60,000 per year, and started Wang's Wicker Furniture Store. He rented a showroom for $20,000 for the year, purchased $60,000 in wicker furniture, and incurred costs of $40,000 for sales help and advertising. In his first year, his revenue was $150,000.
Which of the following profits represent economic profit? Choose all that apply. a. A restaurant makes $10,000 per month in total revenue. Supplies cost $2,000 per month, and labor costs are $3,000 per month. The restaurant's profit is $5,000. b. During the summer, you make ten go-karts and sell each one for $100. It costs you $200 in supplies You could have made $500 during the summer if you had chosen to deliver phone books. Your total profit is $300. c. A high-end airplane company sells five private jets per year. Each jet is sold for $10 million. The profit margin is 12 percent . If you were to change course and make yachts with the same available resources , you would make no additional profit. d. Your company sells 1, 000 cars per month . Each car costs $20,000 . Your cost for parts is $4 million . Your labor costs are $3 million . Your total profit is $13 million .
Please show make the work. I do not understand how the answer is C. However, someone said the answer is B. A company is producing 15,000 units. At this output level, marginal revenue is $22, and the marginal cost is $18. The firm sells each unit for $48 and average total cost is $40. What can we conclude from this information? a. The company is making a loss. b. The company needs to cut production. c. The company needs to increase production. d. Not enough information is provided. Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.Answer completely.You will get up vote for sure.
The following tables show a small firm’s long-run average cost of manufacturing a good at two differentplants:Table1: Plant 1Quantity Total cost Average cost Marginal cost1 332 893 1474 2075 2706 3387 4138 5039 601Table2:Plant 2Quantity Total cost Marginal cost Average cost1 322 643 1024 1425 1876 2397 2978 3579 419a. Complete the third and fourth columns of each table.b. Suppose the price of the good is $60. How many units should the firm produce in each plant tomaximize profit?c. Compute and compare the profits the firm can make if it produces the optimal quantity at eachplant.
Increasing returns and imperfect competition: (a) The production function for the word processor is Y = X – 100 million if X is larger than 100 million, and zero otherwise. By spending $100 million, you create the first copy, and then $1 must be spent distributing it (say for the DVD it comes on). For each dollar spent over this amount, you can create another copy of the software. (b) The production function is plotted in Figure 6.5. Output is zero whenever X is less than 100 million. Does this production function exhibit increasing returns? Yes. We spend $100 million (plus $1) to get the first copy, but doubling our spending will lead to 100 million copies (plus 2). So there is a huge degree of increasing returns here. Graphically, this can be seen by noting that the production function “curves up” starting from an input of zero, a common characteristic of production functions exhibiting increasing returns. (Constant returns would be a straight line starting…
Which of the following is the extra, or additional, cost of producing one more unit of output? Select one: a. Marginal cost Ob. Average fixed cost Oc. Total variable cost Od. Average variable cost
Please answer all parts. Following is the information available for Bubble Gums produced by Bano and Co. Output (Q) Labor (L) Capital (K) Price 0 0 5 10 100 1 5 10 300 2 5 10 600 3 5 10 800 4 5 10 950 5 5 10 1,080 6 5 10 1,120 7 5 10 1,120 8 5 10 1,050 9 5 10 1,000 10 5 10 Define the production function in long run and short run. Find MPL and APL and exhibit it graphically. Identify all three stages of production. Assume you are the Economist for Bano and Co. decide how many labors would you hire to attain the firm’s objective and why.