Essentials of Economics (MindTap Course List)
8th Edition
ISBN: 9781337091992
Author: N. Gregory Mankiw
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 8PA
Subpart (a):
To determine
A fixed cost, average fixed cost,
Subpart (b):
To determine
A fixed cost, average fixed cost, average total cost and average variable cost.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Problem 5: The local government in Karachi is considering two tax proposals:
A lump-sum tax of Rs. 300 on each producer of Ice-cream.
A tax of Rs. 1 per unit of Ice-cream, paid by producers of Ice-cream.
Which cost curves; average fixed cost, the average variable cost, average total cost, and marginal cost would shift as a result of the lump-sum tax? Why?
2. Which cost curves; average fixed cost, the average variable cost, average total cost, and marginal cost would shift as a result of the per-unit tax? Why?
3. Explain with Graphs.
The city government is considering two tax proposals:
•
A lump-sum tax of $300 on each producer of hamburgers.
•
A tax of $1 per burger, paid by producers of hamburgers.
Which of the following statements is true as a result of the lump-sum tax? Check all that apply.
Average fixed cost will decrease.
Average variable cost will increase.
Average total cost will increase.
Marginal cost will remain unchanged.
Which of the following statements is true as a result of the per-burger tax? Check all that apply.
Average total cost will remain unchanged.
Average fixed cost will decrease.
Marginal cost will increase.
Average variable cost will increase.
1. Your cousin Vinnie owns a painting company with fixed costs of $150 and the following schedule for variable costs:
Quantity
Variable Cost
Average Fixed Cost
Average Variable Cost
Average Total Cost
(Houses Painted per Month)
(Dollars)
(Dollars)
(Dollars)
(Dollars)
1
15
2
35
3
60
4
90
5
135
6
240
7
480
The efficient scale is
houses. ?
#2 image :
The city government is considering two tax proposals:
•
A lump-sum tax of $300 on each producer of hamburgers.
•
A tax of $1 per burger, paid by producers of hamburgers.
Which of the following statements is true as a result of the lump-sum tax? Check all that apply.
Which of the following statements is true as a result of the lump-sum tax?
Check all that apply.
Average variable cost will increase.
Average total cost will increase.
Average…
Chapter 12 Solutions
Essentials of Economics (MindTap Course List)
Ch. 12.1 - Prob. 1QQCh. 12.2 - Prob. 2QQCh. 12.3 - Prob. 3QQCh. 12.4 - Prob. 4QQCh. 12 - Prob. 1CQQCh. 12 - Prob. 2CQQCh. 12 - Prob. 3CQQCh. 12 - Prob. 4CQQCh. 12 - Prob. 5CQQCh. 12 - Prob. 6CQQ
Ch. 12 - Prob. 1QRCh. 12 - Prob. 2QRCh. 12 - Prob. 3QRCh. 12 - Prob. 4QRCh. 12 - Prob. 5QRCh. 12 - Prob. 6QRCh. 12 - Prob. 7QRCh. 12 - Prob. 8QRCh. 12 - Prob. 1PACh. 12 - Prob. 2PACh. 12 - Prob. 3PACh. 12 - Prob. 4PACh. 12 - Prob. 5PACh. 12 - Prob. 6PACh. 12 - Prob. 7PACh. 12 - Prob. 8PACh. 12 - Prob. 9PACh. 12 - Prob. 10PA
Knowledge Booster
Similar questions
- Allocative efficiency is an economic concept regarding efficiency at the social or societal level. It refers to producing the optimal quantity of some output, the quantity where the marginal benefit to society of one more unit just equals the marginal cost. The rule of profit maximization in a world of perfect competition was for each firm to produce the quantity of output where P = MC, where the price (P) is a measure of how much buyers value the good and the marginal cost (MC) is a measure of what marginal units cost society to produce. A monopolist... Group of answer choices Would try to achieve allocative efficiency to compete with the other firms who own a larger market share. Will prefer to operate where price < average total cost. Has no motivation to operate at an output level where P=MC, once a barrier is in place and no longer has to worry about competition. Will experience greater profits if it sets prices equal to average total cost.arrow_forwardFor this question, suppose the market for widgets is perfectly competitive and the government introduces a per-unit $1 tax on widgets. Post-tax, quantity of widgets sold in market equals 100. Which of the following is true? A. Reduction in producer surplus due to imposition of tax definitely equals 100 B. Reduction in producer surplus due to imposition of tax certainly equals 100 when the tax is collected from producers, but not when it is collected from consumers. C. Reduction in consumer surplus is definitely smaller than 100. D. Tax revenue is more than 100. E. None of the above.arrow_forwardK Given the input-output matrix below, find the output matrix if final demand changes to 400 for water, 180 for electric power, and 700 for agriculture. Industry: Water Electric Power Agriculture Other Water 120 120 240 720 The output matrix is X = (Round to two decimal places as needed.) Industry Electric Power 400 200 100 300 8 Agriculture Final Demand 180 240 120 60 260 170 500arrow_forward
- As you can read from the image, corporate tax seems to be bad for car companies but because owners invest in other industries it is relatively good for other industries. Doesn't that cancel out the bad effect corporate tax may have on the car industry?arrow_forwardSay the price of a cowboy hat is $100 . Willie can produce a cowboy hat at a marginal cost of $130, Waylon can produce them at a marginal cost of $100, and Merle can produce the hats at a marginal cost of $85. Of the following statements, which is true? Question 5 options: The sum of producer surplus is $15. The sum of producer surplus is $45. All three of these sellers will gain producer surplus from selling a hat. The sum of producer surplus is $30. Willie's producer surplus is $30.arrow_forwardFor this question, suppose the market for widgets is perfectly competitive and the government introduces a per-unit $1 tax on widgets. Post-tax, quantity of widgets sold in market equals 100. Why could the deadweight loss caused by the tax be greater than the tax revenue collected?arrow_forward
- If marginal benefit is equal to marginal cost, then the: A. sum of producer surplus and consumer surplus equals zero. B. market has squeezed out total surplus so that it equals zero. C.sum of producer surplus and consumer surplus is as large as possible. D.producer surplus is equal to the consumer surplus.arrow_forward1. Mzanzi-Ndizvo (Pty) is a vaccine manufacturing company that has the following costs ofproduction. Cost of capital is R50 000, labour cost is R30 000, and the total cost the firm is willing to pay is R300,000. Identify the type of this production function and Illustrate it with a 2D graph. 2. If the demand and supply curve for cell phones is given by: D = 80 - 4P, S = 40 + 6P In a market with a price of P for smartphones, compute the number of phones that would be bought and sold at equilibrium.arrow_forwardA company is considering building a bridge across a river. The bridge would cost $2 million to build and nothing to maintain. The following table shows the company's anticipated demand over the lifetime of the bridge: Price Quantity (Dollars per crossing) (Thousands of crossings) 8 0 7 100 6 200 5 300 4 400 3 500 2 600 1 700 0 800 If the company were to build the bridge, its profit-maximizing price would be $ ? , and it ( would or would not)? produce the efficient level of output. If the company is interested in maximizing profit, it (should , or should not)? build the bridge because profit would be . (Note: If the company incurs a loss, be sure to enter a negative number for profit.) If the government were to build the bridge, it should charge a price of $ ? True or False: The government should build the bridge. True or Falsearrow_forward
- Suppose that the U.S. Congress passes legislation that imposes a one-time lump-sum tariff on the product that a foreign firm exports to the United States. a. What happens to the foreign firm’s marginal cost curve as a result of the lump-sum tariff? b. Will the lump-sum tariff cause the foreign firm to export more or less of the good? Explain carefully.arrow_forwardLooking for a 200 word response to this Warren Buffett statement “You cannot be the high-cost producer in a commodity business.”arrow_forward
arrow_back_ios
arrow_forward_ios
Recommended textbooks for you
Essentials of Economics (MindTap Course List)EconomicsISBN:9781337091992Author:N. Gregory MankiwPublisher:Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning