Foundations of Economics - With MyEconLab
8th Edition
ISBN: 9780134641720
Author: BADE
Publisher: PEARSON
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Question
Chapter 14, Problem 1MCQ
To determine
Choose the correct answer from the following options: A firm's cost of production equals ____.
- All the costs paid with money, called explicit costs
- The implicit costs of using all the firm's own resources
- All explicit costs and implicit costs, excluding normal profit
- The costs of all resources used by the firm whether bought in the marketplace or owned by the firm.
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Check out a sample textbook solutionStudents have asked these similar questions
What's the meaning of "economies of scope"?
A. producing at a higher output means incurring lower average cost
B. producing at a higher output means incurring higher average cost
C. adding product line utilizing the existing resources of the company will reduce the average cost of production
D. all are correct
E. none is correct
Question 1
Output (Q)
Total Fixed Cost (TFC)
Total Variable cost (TVC)
0
100
0
1
100
50
2
100
125
3
100
205
4
100
295
5
100
395
Which of the following is true of marginal costs, based on the data in the table above?
1. Marginal costs are rising throughout the output range shown.
2. Marginal costs are falling throughout the output range shown.
3. Marginal costs are constant
QUESTION 1: Calculate a plant's total cost for every day in the data, in dollars. Total cost is defined as: total_cost = total_raw_materials_cost + total_operating_cost + total_labor_cost.
Which plant is the most expensive to operate, and what is the cost to operate the plant?
QUESTION 2: Which cost source (or combination of sources) makes up the majority of a plants total expenditures?
raw material, labor, operating, or no cost is consistently the majority of total cost across plants
QUESTION 3: Calculate cost efficiency, defined as how much money is spent to produce 1 pound of release ease (i.e. total production/cost).
Which plant is the least cost efficient, in lbs of release ease produced per dollar spent?
What is the daily average efficiency for the plant that is most efficient?
link to excel data:https://docs.google.com/spreadsheets/d/1PM9rh2DnEdKQqCjJM1cmVjcP7_YSdA0y/edit?usp=sharing&ouid=109691244462343090665&rtpof=true&sd=true
Chapter 14 Solutions
Foundations of Economics - With MyEconLab
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Similar questions
- What are diminishing marginal returns as they relate to costs?arrow_forwardReturn to the problem explained in Table 7.13 and Table 7.14. If the cost of labor remains at 40, but the cost of a machine decreases to 50, What would be the total cost of each method of production? Which method should the firm use, and why?arrow_forwardThe WipeOut Ski Company manufactures skis for beginners. Fixed costs are 30. Fill in Table 7.16 for total cost, average variable test, average total cost, and marginal cost.arrow_forward
- A small company that shovels sidewalks and driveways has 100 homes signed up for its services this winter. It can use various combinations of capital and labor: intensive labor with hand shovels, less labor with snow blowers, and still less labor with a pickup truck that has a snowplow on front. To summarize, the method Choices are: Method 1: 50 units of labor, 10 units of capital Method 2: 20 units of labor, 40 units of capital Method 3: 10 units of labor, 70 units of capital If hiring labor for the winter costs $100/unit and a unit of capital costs 400, what is the best production method? What method should the company use if the cost of labor rises to $20/unit?arrow_forwardTrue/False: 1. Implicit costs are those costs, which have been incurred in the past and cannot be recovered bycurrent decisions.2. It is possible for the economic profit and accounting profit to be equal to one another.3. If Ed<1, an increase in price leads to higher revenue.4. In the long run, at least some of the inputs should be variable.5. Production is a transformation of resources in to goods and services.arrow_forward
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